Rusticoville Company inadvertently assigns a $50,000 advertising expense to Manufacturing Overhead. Rusticoville Company has more inventory at the end of the year than at the beginning of the year. The result of this error will be to:
A. Understate inventory and profit for the year.
B. Have no effect on inventory and profit for the year.
C. Overstate inventory and profit for the year.
D. Overstate inventory but have no effect on profit for the year.
Answer:C
Rusticoville Company inadvertently assigns a $50,000 advertising expense to Manufacturing Overhead. Rusticoville Company has more inventory at the end of the year than at the beginning of the year. The result of this error will be to:
A. Understate inventory and profit for the year. B. Have no effect on inventory and profit for the year. C. Overstate inventory and profit for the year. D. Overstate inventory but have no effect on profit for the year.