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Careful Valuation of the Ending Inventory Is Necessary Because Errors

question 46

Essay

Careful valuation of the ending inventory is necessary because errors can result in inaccurate values on both the income statement and balance sheet. Assume that a company overstates its ending inventory for 2016.
Required:
Explain the effects of the error on the income statements and balance sheets for 2016 and 2017.


Definitions:

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