Othello Company understated its inventory by $20,000 at December 31, 2022.It did not correct the error in 2022 or 2023.As a result, Othello's stockholder's equity was:

Question

Quizplus · Accepted Answer

The understatement of inventory in 2022 leads to an understatement of stockholder's equity in 2022. However, by the end of 2023, the error self-corrects in the financial statements, resulting in properly stated stockholder's equity.

Othello Company Understated Its Inventory by $20,000 at December 31