4) When costs are rising, what effect does LIFO have on a balance sheet, compared to FIFO? 5) A company takes a physical count of inventory at the end of 2010 and finds that ending inventory is understated by $10,000. Would this error cause cost of goods sold to be overstated or understated in 2010? In year 2011? If so, by how much? 6) W here is the amount of merchandise inventory disclosed in the financial statements? 7) Under a perpetual inventory system, acquisition of merchandise for resale is debited to the: a.Cost of Goods Sold account b. Purchases account d. Merchandise Inventory account c. Supplies account