Asked by April Thompson on May 05, 2024
Verified
The ending inventory for this year is overstated. 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 understated.
D) None of these is correct.
Period End Assets
The total value of all assets owned by a company at the end of a financial reporting period.
- Appreciate the influence of incorrect inventory accounting practices on financial statements.
Verified Answer
MB
Marielle BiesiadeckiMay 11, 2024
Final Answer :
A
Explanation :
When ending inventory is overstated, the cost of goods sold (COGS) is understated, leading to an overstatement of the period's net income.
Learning Objectives
- Appreciate the influence of incorrect inventory accounting practices on financial statements.
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