In 2017, ending inventory is overstated. What is the effect of the error on total stockholders' equity in 2017 and 2018?
A) Total stockholders' equity is overstated in 2017 and 2018.
B) Total stockholders' equity is understated in 2017 and 2018.
C) Total stockholders' equity is overstated in 2017 and correctly stated at the end of 2018.
D) Total stockholders' equity is overstated in 2017 and understated in 2018.
Correct Answer:
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