Multiple Choice Question

An inventory error not only affects the current year's cost of goods sold, gross profit, net income, current assets and equity, but also the next period's statements

because

net purchases in one period is also the net purchases in the next period.

beginning inventory of one period is the ending inventory of the next period.

ending inventory of one period is the beginning inventory of the next period.

cost of goods sold of one period is the cost of goods sold in the next period.

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