Which of the following best describes why inventory errors are often said to be "self-correcting"?

Question

Quizplus · Accepted Answer

Inventory errors are often said to be "self-correcting" because an inventory error in the current period will have a reverse effect in the next period. For example, if inventory is overstated in the current period, it will be understated in the next period when the correction is made. This means that over time, inventory errors will typically balance out and have less of an impact on financial statements. However, it is important for companies to still identify and correct inventory errors as they can impact financial ratios and overall accuracy of financial statements.

Which of the Following Best Describes Why Inventory Errors Are