Eliza Company discovered the following errors in 2014:

Eliza reported net income of $45,000 for the year 2013. The corrected net income (ignoring income taxes) for 2013 should be
A) $45,000
B) $40,000
C) $46,000
D) $44,000

Question

Eliza Company discovered the following errors in 2014:

Eliza reported net income of $45,000 for the year 2013. The corrected net income (ignoring income taxes) for 2013 should be
A) $45,000 
B) $40,000 
C) $46,000 
D) $44,000

Quizplus · Accepted Answer

The question does not provide any information regarding the nature of errors discovered, so we cannot assume whether they will increase or decrease the net income figure. Since we are ignoring income taxes, the correction will directly impact the net income figure reported for 2013. Therefore, the corrected net income figure for 2013 should be $45,000 plus or minus the impact of the errors discovered in 2014. The only answer choice that is close to this figure is D, $44,000. Therefore, the best choice is D.

Eliza Company Discovered the Following Errors in 2014