Can you please reply to tha post for me?

Hello, everyone!

According to Weygandt (2020), ending inventory errors affect the companys balance sheet. If the ending inventory is overstated, assets and owners equity will be overstated. Consequently, if the ending inventory is understated, assets and owners equity will also be understated. Ending inventory errors have no effect on liabilities whatsoever.

Weygandt (2020) also showed that when the companys ending inventory is erroneous in the current year, the company carries the error into the next year. This occurs because the ending inventory amount of the current year is the beginning inventory amount for the next year. However, after two years, the error washes out and assets and owners equity would be corrected.

Interestingly, Weygandt (2020) mentioned that inventory fraud increases during recessions. Do you agree?

Best regards,

Nate