C. Good Eyeglasses overstated its inventory by $30,000 at the end of 2018. If the error is not discovered until 2020, before adjusting or closing entries, C. Good would need:
A) An increase in 2020 retained earnings.
B) A debit to inventory of $30,000 in 2020.
C) A prospective adjustment in the 2019 income statement.
D) None of these answer choices are correct.

Question

Quizplus · Accepted Answer

By 2020, the 2018 inventory error was counterbalanced in year 2019 and thus no adjustment is needed in 2020.

C Good Eyeglasses Overstated Its Inventory by $30,000 at the End