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10 a company understates its ending inventory in the current period brat efect will this have on cost of goods sold in the fo
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Answer #1

Due to understated estimated ending inventory of the current period, beginning inventory of the following period will be understated.

Due to understated beginning inventory in the following year, cost of goods sold will be understated in the following year, but gross profit and net income will be overstated.

Second option is correct.

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