Question

While finalizing the current year's profit, the company realized that there was an error in the valuation of closing Inventory of the previous year. In the previous year, closing Inventory was valued more by 50,000. As a result:

Previous years profit is overstated and current years profit is understated

A Previous year's profit is overstated and current year's profit is also overstated

B Previous year's profit is overstated and current year's profit is understated

C Previous year's profit is understated and current year's profit is also understated

D Previous year's profit is understated and current year's profit is overstated

E None of the above

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