Question $31$

$1$ pts

$31.$ What impact does it have on your operating performance if $\text{'}$ your total inventory purchase was recorded erroneously as $$35,000,$ when the real purchase was only $$25,000?$ All other information is correctly recorded.

Physical Inventory recorded in the Balance Sheet will be smaller than what it should be$.$

Physical Inventory recorded in the Balance Sheet will be bigger than what it should be$.$

Cost of Sales on the Income Statement would be bigger than it should be$,$ resulting in decreased amount of the Gross Profit.

Cost of Sales on the Income Statement would be smaller than it should be$.$

Thus, the error increases the Gross Profit erroneously.