Sinclair, Inc. uses the perpetual inventory system. The company's management, under pressure to report favorable results to shareholders, counted $15,000 of inventory that had already been sold at year-end. Compared to an accurate inventory count, what is the effect of counting this inventory on the financial statements?

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The Answer of Sinclair, Inc. uses the perpetual inventory system. The company's management, under pressure to report favorable results to shareholders, counted $15,000 of inventory that had already been sold at year-end. Compared to an accurate inventory count, what is the effect of counting this inventory on the financial statements?