Which of the following tends to be the most common method for understating cost of goods sold?
A) Understating purchases
B) Overstating purchase returns
C) Overstating inventory
D) Overstating purchase discounts

Question

Quizplus · Accepted Answer

Overstating inventory can lead to a lower cost of goods sold, which in turn inflates the company's gross profit margin. This can mislead investors into thinking the company is more profitable than it truly is.

Which of the Following Tends to Be the Most Common