Careful valuation of the ending inventory is necessary because errors can result in inaccurate values on both the income statement and balance sheet. Assume that a company overstates its ending inventory for 2016.
Required:
Explain the effects of the error on the income statements and balance sheets for 2016 and 2017.

Question

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The Answer of Careful valuation of the ending inventory is necessary because errors can result in inaccurate values on both the income statement and balance sheet. Assume that a company overstates its ending inventory for 2016.
Required:
Explain the effects of the error on the income statements and balance sheets for 2016 and 2017.

Careful Valuation of the Ending Inventory Is Necessary Because Errors