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Assuming That Ending Inventory for 2009 Was Understated, Indicate Whether

Question 144

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Assuming that ending inventory for 2009 was understated, indicate whether each of the following will be understated (U), overstated (O), or not affected (N).

Premises:
Beginning inventory for 2010
Cost of goods sold for 2009
Stockholders' equity at the end of 2010
Income before income taxes for 2010
Stockholders' equity at the end of 2009
Cost of goods sold for 2010
Income before income taxes for 2009
Responses:
understated (U)
overstated (O)
not affected (N)

Correct Answer:

Beginning inventory for 2010
Cost of goods sold for 2009
Stockholders' equity at the end of 2010
Income before income taxes for 2010
Stockholders' equity at the end of 2009
Cost of goods sold for 2010
Income before income taxes for 2009
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