Wynn Corporation's 2013 Ending Inventory Was Overstated by $20,000; However

Multiple Choice

Wynn Corporation's 2013 ending inventory was overstated by $20,000; however, ending inventory for 2014 was correct. Which of the following statements is correct?

A) Net income for 2013 is understated.
B) Retained earnings at the end of 2014 is overstated.
C) Cost of goods sold for 2014 is overstated.
D) Cost of goods sold for 2013 is overstateD.Overstating inventory at the end of 2013, but correctly reporting inventory at the end of 2014 will cause cost of goods sold to be understated for 2013 and overstated for 2014. However, by the end of 2014, retained earnings will be correctly stated.