Graves Pharmacy reported cost of goods sold as follows: Hill, the bookkeeper, made two errors:
(1) 2013 ending inventory was overstated by $4,000.
(2) 2014 ending inventory was understated by $10,000.
Instructions
Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Question

Graves Pharmacy reported cost of goods sold as follows:  Hill, the bookkeeper, made two errors:
(1) 2013 ending inventory was overstated by $4,000.
(2) 2014 ending inventory was understated by $10,000.
Instructions
Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Quizplus · Accepted Answer

The Answer of Graves Pharmacy reported cost of goods sold as follows:  Hill, the bookkeeper, made two errors:
(1) 2013 ending inventory was overstated by $4,000.
(2) 2014 ending inventory was understated by $10,000.
Instructions
Assuming the errors had not been corrected, indicate the dollar effect that the errors had on the items appearing on the financial statements listed below. Also indicate if the amounts are overstated (O) or understated (U).

Graves Pharmacy Reported Cost of Goods Sold as Follows