Management incentives to overstate ending inventory include all of the following except:
A)increasing the current year's income.
B)increasing next year's income.
C)increasing the collateral value for a loan.
D)increasing the current ratio.

Question

Quizplus · Accepted Answer

Overstating ending inventory can increase current year's income, increase collateral value for a loan, and increase the current ratio. However, it would not directly lead to an increase in next year's income.

Management Incentives to Overstate Ending Inventory Include All of the Following