An Error in Ending Inventory Creates Errors for Two Accounting

question 77

True/False

An error in ending inventory creates errors for two accounting periods.

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Definitions:

GAAP Estimate

An accounting estimate made following Generally Accepted Accounting Principles guidelines.

Prior-Period Adjustment

Corrections made to an organisation’s financial statements for errors found in the financials of preceding periods.

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners, including all unrealized gains and losses.

Operating Loss

A negative financial result that occurs when a company's operating expenses exceed its gross profits.