An accountant made a small error in recording the ending inventory balance for the year. He inadvertently left off a zero and now the Inventory accounts shows a $15,500 balance instead of a $155,000 balance. What will be the impact of the error on the company’s financial statements?

Goods are either in stock(inventory) or sold, if the inventory is understated, cost of goods sold is overstated. As a result, income is understated.