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An overstatement in the value of closing stock overstates all of...

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An overstatement in the value of closing stock overstates all of the following except

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Correct Answer: Option D
An overstatement in the value of closing stock overstates all of the following except Cost of goods sold.
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2 Comments
Khalid Ibrahim
Khalid Ibrahim 5 years ago
why not affect on COGS ? ..when closing stock overstated , it means that this equation will be affected
opening +purchase-cloing =COGS ..which mean decrease on COGS value and as a result ,increase in Gross profit ...why thi not affect on COGS according to your answer ?
Daamiz Bhat
Daamiz Bhat 5 years ago
We calculate cost of goods sold using the equation :
COGS = Purchases + Opening stock -closing stock
As per this equation , when closing stock is overstated , the cost of goods sold would be aatected.
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