Correcting Discrepancies Flashcards
1
Q
How is beginning inventory related to COGS
A
They are directly related. If one goes up, so does the other.
2
Q
How is ending inventory related to COGS
A
They are inversely related. If one goes down, the other goes up.
3
Q
If the ending inventory is understated, how will COGS be affected?
A
COGS will be overstated, and Income will be understated.
