If a Company Overstates Its Ending Inventory for the Current

Short Answer

If a company overstates its ending inventory for the current year, what are the effects on cost of goods sold and net income for the current year? $\begin{array}{ll}\text { Effect on Cost of Goods Sold } & \text { Effect on Net Income } \\\hline \text { a. Understated } & \text { Overstated } \\\text { b. Overstated } & \text { No effect } \\\text { c. Understated } & \text { Understated } \\\text { d. Overstated } & \text { Overstated }\end{array}$