Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2016,but the inventory was excluded in error during the ending inventory count.What impact will this have on fiscal 2017 financial reporting?
A)Gross margin is understated by $1,000.
B)Cost of sales is overstated by $1,000.
C)Ending inventory is understated by $1,000.
D)Beginning inventory is understated by $1,000.

Question

Quizplus · Accepted Answer

The beginning inventory for fiscal 2017 will be understated by $1,000 because the inventory was excluded in error during the ending inventory count of fiscal 2016.

Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded