1. When management overstates inventory, it ______ current years income and _____ the next years income

a) overstates, does not affect

b) overstates, overstates

c) understates, overstates

d) overstates, understates

2. When management creates fictitious revenue, it ______ current years income and _____ the next years income

a) overstates, does not affect

b) overstates, overstates

c) understates, overstates

d) overstates, understates