Phipps Corporation Overstated Its Ending Inventory on December 31,2015

question 72

Multiple Choice

Phipps Corporation overstated its ending inventory on December 31,2015.Which of the following answers correctly identifies the effect of the error on 2016 financial statements?

• A)Cost of goods sold is overstated.
• B)Gross margin overstated.
• C)Ending inventory is understated.
• D)Net income is overstated.