Inventory errors

2 Pages
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Department
Financial Accounting
Course Code
MGAB01H3
Professor
Liang Chen

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Description
Inventory errors Income Statement effects An error in ending inventory of the current period will have a reverse effect on net income of the next period Balance Sheet effects Statement Valuation and Presentation Valuing Inventory at the lower of cost and market (LCM) Sometimes, inventory value is lower than its cost. The inventory can be written down to its market value LCM is an example of the accounting concept of conservatism. Conservatism means
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