There Is an Error in Computing Ending Inventory in Year

question 75

Multiple Choice

There is an error in computing ending inventory in Year 1.Which statement is TRUE?

• A)The error will have no effect on Year 2 financial statements.
• B)After three years,the inventory error will counterbalance.
• C)Gross profit will continue to be incorrect until an adjusting entry is made.
• D)The total gross profit for Year 1 and Year 2 combined will be correct.

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