A material overstatement in ending inventory was discovered after the year-end financial statements of a...
FINANCIAL
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A material overstatement in ending inventory was discovered after the year-end financial statements of a company were issued to the public. What effect did this error have on the year-end financial statements?
- A) Current assets: Understated; Gross profit: Overstated
- B) Current assets: Overstated; Gross profit: Overstated
- C) Current assets: Understated; Gross profit: Understated
- D) Current assets: Overstated; Gross profit: Understated
Correct Answer: B) Current assets: Overstated; Gross profit: Overstated
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