If a period-end inventory amount is reported in error, it can cause a misstatement in all of the following except:
A) Cost of goods sold.
B) Gross profit.
C) Net sales.
D) Current assets.
E) Net income.

Question

Quizplus · Accepted Answer

Net sales are primarily affected by the number of units sold and the selling price per unit, not by the inventory amount. Inventory errors impact cost of goods sold, gross profit, current assets, and net income, but not the net sales figure directly.

If a Period-End Inventory Amount Is Reported in Error, It