An error in the measurement of ending inventory affects the cost of sales on the current period's statement of earnings and ending inventory on the statement of ﬁnancial position.

Question

Quizplus · Accepted Answer

An error in the measurement of ending inventory will directly affect the cost of sales on the statement of earnings, as well as the value of ending inventory on the statement of financial position. This is because ending inventory is used to determine cost of goods sold, and any errors in the measurement of ending inventory will therefore impact the calculation of cost of sales.

An Error in the Measurement of Ending Inventory Affects the Cost