An error in valuing inventory will cause an error in the amount of cost of goods sold.

Name: An error in valuing inventory will cause an error in the amount of cost of goods sold.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

An error in valuing inventory will directly affect the cost of goods sold since cost of goods sold is calculated by subtracting the cost of ending inventory from the cost of goods available for sale. If the value of inventory is incorrect, it will result in an incorrect calculation of cost of goods sold.

An Error in Valuing Inventory Will Cause an Error in the Amount