Log in

View Full Version : Error on the company financial statements


SassyR36040
Jan 16, 2008, 12:48 PM
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?

MaggieMouse
Feb 5, 2008, 09:27 PM
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.