AIf the Beginning Balance of the Inventory Account and the Cost

question 18

Essay

a.If the beginning balance of the Inventory account and the cost of items purchased or made during the period are correct, but an error resulted in understating the firm's ending inventory balance by $12,000, how would the firm's cost of goods sold be affected?
b.If management wanted to overstate net income, would ending inventory be understated or overstated? Explain your answer.

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Definitions:

Import Spreadsheet Wizard

A tool or assistant in software applications that guides users through the process of importing data from a spreadsheet into another application or format.

Linking Spreadsheet Wizard

A tool in database software that assists users in linking data from a spreadsheet, integrating it into the database system.

Copy Data

Refers to the process of duplicating information from one location to another in computing environments.

Linked Table

A table in a database that maintains a dynamic connection to data in another database, allowing for data updates in the source to be reflected in the linked table.