Upaway Company Hired Some Students to Help Count Inventory During

question 88

Multiple Choice

Upaway Company hired some students to help count inventory during their semester break. Unfortunately, the students added incorrectly and ending inventory was overstated by $12,000. What would be the effect of this error in ending inventory?

• A) Cost of goods sold would be overstated.
• B) Ending retained earnings would be understated.
• C) Profit would be overstated.
• D) Profit would be understated.

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