A counterbalancing inventory error is one where the error on the balance sheet is offset by the same amount of error on the income statement.

Name: A counterbalancing inventory error is one where the error on the balance sheet is offset by the same amount of error on the income statement.
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A counterbalancing inventory error is one that self-corrects over two accounting periods, affecting both the balance sheet and income statement, but not necessarily by the same amount.

A Counterbalancing Inventory Error Is One Where the Error on the Balance