Which statement is correct about inventory errors?
A)Misstatements in inventory can affect the beginning inventory amounts.
B)Misstatements in inventory are likely to affect only the current accounting period.
C)Misstatements in inventory are likely to only affect one reporting period.
D)Misstatements self-correct over three reporting periods.

Question

Quizplus · Accepted Answer

Misstatements in inventory can affect the beginning inventory amounts, as they can carry over from the previous period if not corrected. They can also affect the current period and potentially future periods if not addressed. Option B, C, and D are not accurate as they underestimate the impact and potential longevity of inventory errors.

Which Statement Is Correct About Inventory Errors