An incorrect valuation of the ending inventory affects the balance sheet but not the income statement.

Name: An incorrect valuation of the ending inventory affects the balance sheet but not the income statement.
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Question

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An incorrect valuation of the ending inventory affects both the balance sheet and the income statement. It can affect the Cost of Goods Sold (COGS) and Gross Profit on the income statement, as well as the value of inventory on the balance sheet.

An Incorrect Valuation of the Ending Inventory Affects the Balance