Which statement is not correct about inventory errors?
A)Misstatements in inventory can affect the beginning inventory amounts.
B)Misstatements in inventory can affect the ending inventory amounts.
C)Misstatements in inventory affect current ratios.
D)Misstatements in inventory have no effect on net income.

Question

Quizplus · Accepted Answer

Misstatements in inventory directly affect the cost of goods sold, which in turn affects net income. If inventory is overstated or understated, it will lead to incorrect calculation of gross profit and thus net income.

Which Statement Is Not Correct About Inventory Errors