An error
A) in the ending inventory of the current period will have no effect on net income of the next accounting period.
B) that understates the ending inventory will cause net income for the period to be overstated.
C) that understates the ending inventory will cause assets to be understated.
D) that understates the ending inventory will cause the cost of goods sold for the period to be understated.

Question

Quizplus · Accepted Answer

An understatement of ending inventory means that assets are reported lower than they actually are, as inventory is part of the assets on the balance sheet.

An Error