The Understatement of the Ending Inventory Balance Causes

question 34

Multiple Choice

The understatement of the ending inventory balance causes:

• A) Cost of goods sold to be understated and net income to be understated.
• B) Cost of goods sold to be overstated and net income to be understated.
• C) Cost of goods sold to be overstated and net income to be overstated.
• D) Cost of goods sold to be overstated and net income to be correct.
• E) Cost of goods sold to be understated and net income to be overstated.

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