Question

(True) or (False)? Understated ending inventory results in an understatement of cost of goods sold and an understatement of gross margin and net income.

Answer 1

FALSE

Step-by-step explanation:

The understated ending inventory results in an understatement of cost of goods sold and an understatement of gross margin and net income is False.

Answer 2

FALSE

Step-by-step explanation:

If you understated ending inventory, your cost of goods sold will be overstated by the error amount, and net income and gross profit are understated