Which of the following statements is incorrect?

Question

Quizplus · Accepted Answer

Explanation:- A) is correct because if inventory with unrealised profit is not sold in the current period, adjustments would indeed be needed in the next period when calculating profits.- B) is incorrect because the opening inventory at the start of one period does not become the closing inventory in the profit and loss summary for the next period. Instead, the closing inventory at the end of one period becomes the opening inventory for the next period.- C) is correct as it accurately describes the transition of closing inventory at the end of one period to opening inventory at the start of the next period.- D) is correct because from an economic entity viewpoint, if a consolidation adjustment is not made to eliminate unrealised profit in opening inventory, it will result in an overstatement of the opening inventory of the economic entity.

Which of the Following Statements Is Incorrect