If the inventory at the end of the current year is understated and the error…

If the inventory at the end of the current year is understated and the error is not caught during the following year, the effect is to?
  • A.
    overstate income this year and understate in next year
  • B.
    understate income this year and overstate in next year
  • C.
    understate this year’s income with no effect on the next year’s
  • D.
    overstate the income for the two-year period
Correct Answer: Option A
Explanation
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