Ending inventory for the current accounting period is overstated by $2,700.What effect will this error have on Cost of Goods Sold and Net Income for the current accounting period?

Question

Quizplus · Accepted Answer

Overstating ending inventory will result in understating cost of goods sold and overstating net income. Therefore, correcting the error will decrease net income by $2,700 and increase cost of goods sold by $2,700.

Ending Inventory for the Current Accounting Period Is Overstated by $2,700.What