The client may use a variety of methods to overstate inventory.These include
A)inaccurate purchase history
B)inaccurate inventory expense recording
C)incorrect recognition of customer rebates
D)incorrect LIFO reserve calculations
E)failure to write-off obsolete inventory
F)both A and C
G)both D and E

Question

Quizplus · Accepted Answer

Incorrect LIFO (Last In, First Out) reserve calculations and failure to write-off obsolete inventory can both lead to overstated inventory values. Incorrect LIFO reserve calculations can inflate the value of ending inventory, while failing to write off obsolete inventory keeps its value on the books, also inflating inventory values.

The Client May Use a Variety of Methods to Overstate