An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory.The effect of this error in the current period is
$\begin{array}{ll}\text { Cost of Goods Sold }&\text { Net Income }\\end{array}$

Question

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory.The effect of this error in the current period is 
$\begin{array}{ll}\text { Cost of Goods Sold }&\text { Net Income }\\end{array}$

Quizplus · Accepted Answer

An overstatement of ending inventory results in an understatement of the cost of goods sold, which in turn overstates net income.

An Error in the Physical Count of Goods on Hand Cost of Goods Sold Net Income \begin{array}{ll}\text { Cost of Goods Sold }&\text { Net Income }\\\end{array} Cost of Goods Sold ​ Net Income ​

An Error in the Physical Count of Goods on Hand $\begin{array}{ll}\text { Cost of Goods Sold }&\text { Net Income }\\\end{array}$