An error in ending inventory causes an error in the next period's:
A)Sales.
B)Beginning inventory.
C)Accounts payable.
D)Accounts receivable.
E)Shipping costs.

Question

Quizplus · Accepted Answer

An error in ending inventory will affect the beginning inventory of the next period because it is carried over as the starting point for the calculation of ending inventory in the next period. This will affect the cost of goods sold and subsequently the net income of the period. The error will not directly affect sales, accounts payable, accounts receivable, or shipping costs.

An Error in Ending Inventory Causes an Error in the Next