If ending inventory is overstated in 2017, and no further errors are made in 2018, then profit will be

Question

Quizplus · Accepted Answer

An overstated ending inventory in 2017 will result in an overstated profit for that year because the cost of goods sold will be understated. In 2018, the beginning inventory will be overstated, leading to an overstated cost of goods sold and thus an understated profit, assuming no further errors are made.

If Ending Inventory Is Overstated in 2017, and No Further