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What Effect Will an Overstatement of Ending Inventory at the End

Question 66

Multiple Choice

What effect will an overstatement of ending inventory at the end of Year 1 have on the amounts reported on the Year 1 financial statements?

A) Overstatement of cost of goods sold
B) Overstatement of total assets
C) Understatement of net income
D) Understatement of retained earnings

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