At 31 December 2012,the end of their accounting year,the Black Sheep Wool Cooperative understated ending inventory by $3,000.The profit for 2012 will be:

Question

Quizplus · Accepted Answer

The understatement of ending inventory will result in a lower cost of goods sold, which will increase the reported profit. However, since the ending inventory was understated, the reported profit will be artificially inflated. Therefore, the profit for 2012 will be understated.

At 31 December 2012,the End of Their Accounting Year,the Black