Use the following information for questions through. Giselle Ltd.is a calendar-year corporation.Its financial statements for the years 2015 and 2014 contained errors as follows:
-Assume that no correcting entries were made at December 31, 2014, or December 31, 2015 and that no additional errors occurred in 2016.Ignoring income taxes, by how much will working capital, at December 31, 2016 be overstated or understated?
A)$0
B)$4,000 overstated
C)$4,000 understated
D)$6,000 understated

Question

Use the following information for questions through. Giselle Ltd.is a calendar-year corporation.Its financial statements for the years 2015 and 2014 contained errors as follows: 
-Assume that no correcting entries were made at December 31, 2014, or December 31, 2015 and that no additional errors occurred in 2016.Ignoring income taxes, by how much will working capital, at December 31, 2016 be overstated or understated?
A)$0 
B)$4,000 overstated 
C)$4,000 understated 
D)$6,000 understated

Quizplus · Accepted Answer

Since no correcting entries were made and no additional errors occurred, the working capital at December 31, 2016, remains unaffected by past errors, resulting in no overstatement or understatement.

Use the Following Information for Questions Through