Items on Harris's ledger for inventory that are purchased and correctly debited to 2013 purchases, but improperly included in 2013 ending inventory would have overstated both asset and pre-tax income of 2013.

Question

Quizplus · Accepted Answer

If the items are incorrectly included in 2013 ending inventory, it would actually understate pre-tax income for 2013 because the cost of goods sold would be understated. Additionally, it would overstate the value of the ending inventory asset.

Items on Harris's Ledger for Inventory That Are Purchased and Correctly