Use the following information for questions

-Assuming that none of the errors was detected or corrected, by what amount will retained earnings at December 31, 2011 be overstated or understated?
A)$23,000 understated
B)$17,000 understated
C)$8,000 understated
D)$10,000 overstated

Question

Use the following information for questions 
 
-Assuming that none of the errors was detected or corrected, by what amount will retained earnings at December 31, 2011 be overstated or understated?
A)$23,000 understated 
B)$17,000 understated 
C)$8,000 understated 
D)$10,000 overstated

Quizplus · Accepted Answer

Based on the information given, the error was to record $8,000 of revenue received in January 2012 as revenue earned in December 2011. This would have overstated retained earnings in December 2011 by $8,000. Therefore, the correct answer is option C: $8,000 understated.

Use the Following Information for Questions