Question

Kilian Company's inventory balance at the end of the current year does not include $10,000 of inventory that was stored in a separate warehouse and accidentally excluded from the physical count. If the error is not discovered, the effect of this error on financial statements in the following year will be_________

Answer 1

Answer:

underestimated inventory

net income decrease

higher storage expenses

Explanation:

decrease in net income since it could not be sold

higher expenses for storage to maintain inventory