An inventory error carried forward into the next period causes misstatements in:

Question

Quizplus · Accepted Answer

An inventory error carried forward into the next period can cause misstatements in the cost of goods sold, gross profit, and net income. This is because inventory is a key component in calculating these financial measures. If inventory is overstated, cost of goods sold will be understated, leading to an overstatement of gross profit and net income. If inventory is understated, the opposite will occur. Therefore, all answer choices are correct.

An Inventory Error Carried Forward into the Next Period Causes