Overstating Ending Inventory Has the Following Effect on Cost of Goods

question 16

Multiple Choice

Overstating ending inventory has the following effect on cost of goods sold and net income respectively.

• A) COGS - overstated and NI - overstated
• B) COGS - understated and NI - overstated
• C) COGS - overstated and NI - understated
• D) COGS - no effect and NI - understated

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