An overstatement of reported net income for the current year may result from

A) an overstatement of ending inventory in the previous period
B) an overstatement of ending inventory in the current period
C) failure to record accrued payroll liabilities
D) failure to record expiration of prepaid insurance

Ending Inventory

At the close of an accounting cycle, the valuation of products set for sale, computed by taking the initial inventory, adding the acquisitions, and deducting the cost of goods sold.

Reported Net Income

The final profit figure stated in a company's financial statements, as reported to shareholders and used for earnings per share calculations.

Accrued Payroll

Salaries and wages that have been earned by employees but have not yet been paid by the company.