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Erroneous Statements

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Burt the 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?

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Solution Summary

161 words explain the impact of error in a company's financial statements.

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The effect of an error resulting in an understatement of ending inventory is to:

overstate cost of goods sold of the current period ...

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