An employee accidentally overstated the year's advertising expense by $50,000.Which of the following correctly depicts the effect of this error?
A)Cost of goods manufactured will be overstated by $50,000.
B)Cost of goods sold will be overstated by $50,000.
C)Both cost of goods manufactured and cost of goods sold will be overstated by $50,000.
D)Cost of goods sold will be overstated by $50,000, and cost of goods manufactured will be
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

Advertising expense is not directly related to the cost of goods manufactured or sold, so overstating it does not affect these costs.

An Employee Accidentally Overstated the Year's Advertising Expense by $50,000