Asked by
vincent mutinda
on Nov 12, 2024
Verified
If the ending inventory of finished goods is understated, net income will be overstated.
Ending Inventory
The pricing of available merchandise at the termination of an accounting interval, computed by taking the starting inventory, adding buying costs, and subtracting the cost of goods sold.
Net Income
The total earnings of a company after all expenses and taxes have been subtracted from total revenue.
- Identify the role of inventory in the cost of goods sold calculation and its impact on net income.
Verified Answer
SE
Learning Objectives
- Identify the role of inventory in the cost of goods sold calculation and its impact on net income.