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

The overstated inventory will result in a lower cost of goods sold, which will increase net income. Therefore, the error will result in an overstatement of net income by $2,700. Choice B is the only option that reflects this.

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