Which of the following 2011 financial statement line items will be affected if the 2011 ending inventory balance is overstated?

Question

Quizplus · Accepted Answer

If the ending inventory balance is overstated, it means that the cost of goods sold (COGS) will be understated because the calculation of COGS is based on the beginning inventory balance plus purchases minus the ending inventory balance. Therefore, choice A is the correct answer. The other choices are not affected by the ending inventory balance being overstated.

Which of the Following 2011 Financial Statement Line Items Will