The financial statements of Betty Company contained the following errors: $$\begin{array} { | l | l | l | }
\hline \text { Item } & \text { December 31, 20X1 } & \text { December 31, 20X2 } \
\hline \text { Depreciation expense on office equipment } & \$ 500 \text { understated } & \$ 600 \text { overstated } \
\hline
\end{array}$$ Respond to each of the following (disregard income taxes):
A. Profit for 20X1, was understated or overstated (circle one).
B. Total combined profit for the two-year period ended December 31, 20X2, was overstated or understated (circle one).

Question

The financial statements of Betty Company contained the following errors: $$\begin{array} { | l | l | l | } 
\hline \text { Item } & \text { December 31, 20X1 } & \text { December 31, 20X2 } \
\hline \text { Depreciation expense on office equipment } & \$ 500 \text { understated } & \$ 600 \text { overstated } \
\hline
\end{array}$$ Respond to each of the following (disregard income taxes): 
A. Profit for 20X1, was understated or overstated (circle one).
B. Total combined profit for the two-year period ended December 31, 20X2, was overstated or understated (circle one).

Quizplus · Accepted Answer

The Answer of The financial statements of Betty Company contained the following errors: $$\begin{array} { | l | l | l | } 
\hline \text { Item } & \text { December 31, 20X1 } & \text { December 31, 20X2 } \
\hline \text { Depreciation expense on office equipment } & \$ 500 \text { understated } & \$ 600 \text { overstated } \
\hline
\end{array}$$ Respond to each of the following (disregard income taxes): 
A. Profit for 20X1, was understated or overstated (circle one).
B. Total combined profit for the two-year period ended December 31, 20X2, was overstated or understated (circle one).

The Financial Statements of Betty Company Contained the Following Errors