Question

Last years ending inventory was overstated. This error would cause...

A. this periods net income to be overstated
B. This periods net income to be understated
C. This periods end assets to be overstated
D. None of the above

Answer 1

This periods end assets to be overstated

Step-by-step explanation:

As inventory is summarized in the assets if the final inventory is overstated it will generate an overstate in the following years.