Which assertion for ending inventory is most likely at risk of material misstatement if the gross profit percentage is much greater than last year?
A)Existence.
B)Completeness.
C)Rights and obligations.
D)Accuracy.

Question

Quizplus · Accepted Answer

A higher gross profit percentage than last year may indicate that ending inventory is overstated, which affects the existence assertion. This could mean that inventory that does not exist is being reported, inflating profits.

Which Assertion for Ending Inventory Is Most Likely at Risk