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malfutka [58]
2 years ago
13

If the ending inventory in the previous period was understated $17,000 and the ending inventory in the current period was overst

ated $27,000. Which of the following is understated in the current period?
a. Owner's equity
b. Cost of goods sold
c. Net income
d. All the other answers are correct
Business
1 answer:
kotegsom [21]2 years ago
4 0

Answer:

In the current period,

b. Cost of goods sold

Explanation:

With the current period's beginning inventory (or previous period's ending inventory) understated by $17,000 and the overstatement of the current period's ending inventory by $27,000, it implies that the Cost of goods sold is understated by $10,000.  Once this cost is understated, the net income will be overstated, as well as the owner's equity (via the retained earnings).

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