Respuesta :
If ending inventory is understated, cost of goods sold would be overstated and net income would be understated.
Ending inventory can be described as the total quantity of inventory that is available for sale that is still unsold at the end of the year. If ending inventory is understated, it means that the value recorded is less than its actual value.
Ending inventory can be determined using this formula: Beginning inventory + net purchases – cost of goods sold.
An understated ending inventory means that the cost of goods sold is lower than its actual value. When the cost of goods sold is lower than its actual value, net income's value would be higher than its actual value.
A similar question was answered here: https://brainly.com/question/14256129?referrer=searchResults
Ans
Cost of goods sold will be overstated and net income will be understated.
Explanation:
