Practice Quiz

Forensic Accounting

Category - Specialized Forensic Knowledge

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If ending inventory is overvalued, how does it affect the cost of goods sold and net income?
  1. COGS increases and net income decreases
  2. Both decreases
  3. Both increases
  4. COGS decreases and net income increases
Explanation
Answer: D - When ending inventory is overvalued, then the cost of goods sold decreases and net income increases.
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