Font Paragraph Styles 2. A $25,000 overstatement of the 2016 ending inventory was discovered after the financial statements for 2016 were prepared. Which of the following describes the effect of the inventory error on the 2016 financial statements? A. Current assets were overstated and net income was understated. B. Current assets were understated and net income was understated. C. Current assets were overstated and net income was overstated. D. Current assets were understated and net income was overstated. 3. Which of the following is correct when, in the same year, beginning inventory is overstated by $1,300 and ending inventory is understated by $700? A. Net income is understated by $600. B. Net income is understated by $2,000. C. Net income is overstated by $600. D. Net income is overstated by $2,000. Page 2 of 3 352 words English (United States)