Assume that no correcting entries were made at December 31, 2010, or December 31, 2011 and that no additional errors occurred in 2011.Ignoring income taxes, by how much will working capital, at December 31, 2011 be overstated or understated?
A)$0
B)$4,000 overstated
C)$4,000 understated
D)$3,000 understated

Question

Quizplus · Accepted Answer

If no correcting entries were made and no additional errors occurred, the working capital would not be affected by any errors from previous years, thus it remains unchanged.

Assume That No Correcting Entries Were Made at December 31