Ask Question
5 November, 15:49

If the amount of ending inventory is overstated, the amount ofMultiple Choicenet income will be overstated. total assets will be overstated. retained earnings will be overstated. All of the answers are correct.

+3
Answers (1)
  1. 5 November, 18:17
    0
    All of the answers are correct.

    Explanation:

    The movement in inventory balance is as a result of purchases and sales. The opening and closing balances are so related;

    Opening balance + purchases - cost of goods sold = closing balance

    Hence overstating the closing balance results in an understatement of cost of goods sold thereby resulting in an overstatement of net income and then retained earning.

    Assets are also overstated
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “If the amount of ending inventory is overstated, the amount ofMultiple Choicenet income will be overstated. total assets will be ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers