If a company makes an error when counting ending inventory in 2013, the effect of the error will cancel out at the end of 2014.

Name: If a company makes an error when counting ending inventory in 2013, the effect of the error will cancel out at the end of 2014.
Brand: Quizplus
Rating: 4.9 (60 reviews)

Question

Quizplus · Accepted Answer

An inventory error in one year affects the cost of goods sold and net income for that year, but the error reverses in the following year, correcting the retained earnings and balancing the financial statements over the two-year period.

If a Company Makes an Error When Counting Ending Inventory