Question

Salvage value was ignored when originally calculating the units-of-production depreciation. This error would cause A. the period’s net income to be overstated. B. the period’s net income to be understated. C. the period end assets to be overstated. D. None of the above

Answer 1

I think the correct answer would be that the period's net income that is calculated would be overstated. Not accounting the salvage would mean that the calculated income is too much of what it really is since the depreciation value is miscalculated. Hope this helps.