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Assume That Ending Inventory in Fiscal 2016 Is Overstated by $1,000.What

Question 49

Multiple Choice

Assume that ending inventory in fiscal 2016 is overstated by $1,000.What impact will this have on fiscal 2017 financial reporting?


A) Retained earnings is overstated by $1,000.
B) Gross margin is understated by $1,000.
C) Cost of sales is understated by $1,000.
D) Inventory is understated on the balance sheet.

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