How will a $25,000 understatement of ending inventory in one year affect the liabilities of the company in both the current and subsequent years?

• :

  It will result in a $25,000 understatement of liabilities in the current year and a $25,000 overstatement in the subsequent year.

• B :

  It will have no impact on liabilities in either the current or subsequent years.

• C :

  It will have no impact on liabilities in the current year and result in a $25,000 understatement in the subsequent year.

• D :

  It will result in a $25,000 understatement of liabilities in the current year and have no impact in the subsequent year.