Fran Companys ending inventory is under- (SO 8) stated by $4,000. The effects of this error on

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Fran Company’s ending inventory is under- (SO 8)

stated by $4,000. The effects of this error on the current year’s cost of goods sold and net income, respectively, are:

(a) understated and overstated.

(b) overstated and understated.

(c) overstated and overstated.

(d) understated and understated.

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