If an inventory amount is reported in error, it can cause a misstatement in
A) Cost of goods sold
B) Gross profit
C) Net income
D) Current assets
E) All of the above

Question

Quizplus · Accepted Answer

If an inventory amount is reported in error, it can affect the cost of goods sold, gross profit, and net income because these figures are all calculated using inventory figures. In addition, it can also affect current assets, as inventory is typically reported as part of current assets on the balance sheet.

If an Inventory Amount Is Reported in Error, It Can