Which of the following statements on inventory valuation errors is false? a. Over a two-year period, misstatements of ending inventory will balance themselves out. b. An overstatement of ending inventory overstates net income. c. An understatement in net income is the result of an overstatement in cost of goods sold. d. An overstatement of cost of goods sold overstates ending inventory.
Which of the following statements on inventory valuation errors is false? a. Over a two-year period, misstatements of ending inventory will balance themselves out. b. An overstatement of ending inventory overstates net income. c. An understatement in net income is the result of an overstatement in cost of goods sold. d. An overstatement of cost of goods sold overstates ending inventory.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 17E: Errors A company that uses the periodic inventory system makes the following errors: 1. It omits a...
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Which of the following statements on
a. Over a two-year period, misstatements of ending inventory will balance themselves out.
b. An overstatement of ending inventory overstates net income.
c. An understatement in net income is the result of an overstatement in cost of goods sold.
d. An overstatement of cost of goods sold overstates ending inventory.
Expert Solution
Step 1
Ending inventory as regarding as credit item and will effect net income and balance sheet values.
Any over statement of ending inventory will increase the profits and assets and vice versa.
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