Overstating ending inventory will overstate all of the following except
A) assets.
B) cost of goods sold.
C) net income.
D) stockholders' equity.

Question

Quizplus · Accepted Answer

Overstating ending inventory will not overstate the cost of goods sold. In fact, it will have the opposite effect and will understate the cost of goods sold, which in turn will overstate net income and stockholders' equity. However, it will overstate assets since ending inventory is a component of the asset account "inventory."

Overstating Ending Inventory Will Overstate All of the Following Except