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A Company Understated Its Ending Inventory Balance by $8,000 in 2015.What

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Essay

A company understated its ending inventory balance by $8,000 in 2015.What impact will this error have on cost of goods sold and gross profit in 2015 and 2016?


Definitions:

Creditor/Debtor Transaction

A financial agreement involving a creditor providing funds or resources to a debtor who in return promises to repay the creditor.

Real Property

Immovable property such as land, buildings, and other structures that are permanently attached to the land.

Chose in Action

A personal right not attached to any physical property, recoverable by a lawsuit, such as debts, copyrights, or patents.

Chattels

Personal property that is tangible and movable.

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