An overstatement of ending inventory in a period will result in an understatement of gross margin in that period.

Name: An overstatement of ending inventory in a period will result in an understatement of gross margin in that period.
Brand: Quizplus
Rating: 4.8 (37 reviews)

Question

Quizplus · Accepted Answer

An overstatement of ending inventory will result in an overstatement of gross margin, not an understatement. This is because if ending inventory is overstated, the cost of goods sold will be understated, leading to a higher gross margin.

An Overstatement of Ending Inventory in a Period Will Result