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Newcastle Company Has the Following Inventory Data for the Current

Question 60

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Newcastle Company has the following inventory data for the current period: Newcastle Company has the following inventory data for the current period: Assume that the ending inventory is understated by $5,000.What is the effect on the current period's net income? A) It will be overstated by $5,000. B) It will be understated by $5,000. C) It will be understated by $20,000. D) The inventory error will have no effect on net income. Assume that the ending inventory is understated by $5,000.What is the effect on the current period's net income?


A) It will be overstated by $5,000.
B) It will be understated by $5,000.
C) It will be understated by $20,000.
D) The inventory error will have no effect on net income.

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