An error in Cost of Goods sold has _______________ impact on gross profit and profit.
A) no
B) the opposite
C) the same
D) immaterial

Question

Quizplus · Accepted Answer

An error in Cost of Goods Sold (COGS) directly affects the calculation of Gross Profit, as Gross Profit is calculated by subtracting COGS from Sales Revenue. Therefore, an error in COGS would have the opposite impact on Gross Profit and subsequently on profit, as an overstatement in COGS would lead to an understatement in Gross Profit and vice versa.

An Error in Cost of Goods Sold Has _______________ Impact