Question: It is discovered in 2013 that ending inventory in 2011 was understated. What is the effect of the understatement on the following? 2011: Cost of

It is discovered in 2013 that ending inventory in 2011 was understated. What is the effect of the understatement on the following?

2011:

Cost of goods sold

Net income

Ending retained earnings

2012:

Net purchases

Cost of goods sold

Net income

Ending retained earnings


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