How many years does it take for an inventory error to correct itself assuming the ending inventory count in the second year is correct?

Question

Quizplus · Accepted Answer

It takes two years for an inventory error to correct itself assuming the ending inventory count in the second year is correct. This is because the error will be carried forward and impact the beginning inventory of the next accounting period. However, if the ending inventory count in the second year is correct, it means that the error has been corrected and the inventory balance for the current period is accurate. Therefore, it takes two years for the error to be fully corrected.

How Many Years Does It Take for an Inventory Error