If Ending Inventory Is Overstated by $6,000,then

question 119

Multiple Choice

If ending inventory is overstated by $6,000,then:

• A)stockholders' equity is overstated by $6,000.
• B)cost of goods sold is understated by $6,000.
• C)gross profit is understated by $6,000.
• D)A and B.

Understand the difference between FIFO, LIFO, and the weighted-average inventory costing methods.

Apply the gross profit method to estimate inventory and understand its implications on financial reporting.

Understand the specific invoice method and its application in inventory costing.

Calculate ending inventory and its effects on the balance sheet.

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