Multiple Select Question

Select all that apply

In year $1$ ending inventory is overstated by $$2,000.$ Explain the effect on cost of goods sold, gross profit and net income in year $1$ and year $2$ Select all answers

that apply.

Cost of goods sold in the curre$$t year, year $1,$ will be understated.

Cost of goods sold in the following year, year $2,$ will be overstated.

Net income in the next year, year $2,$ will not be affected by the error

Net income in the next year, year $2,$ will be overstated.

Gross profit in the next year, year $2,$ will be understated.

Cost of goods sold in the current year, year $1,$ will be overstated.

Gross profit in the current year, year $1,$ will be overstated.

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