A material overstatement in ending inventory was discovered after the year-end financial statements of a company were issued to the public. What effect did this error have on the year-end financial statements?
|
Current assets |
Gross profit |
|
|
a. |
Understated |
Overstated |
|
b. |
Overstated |
Overstated |
|
c. |
Understated |
Understated |
|
d. |
Overstated |
Understated |