Cake Mart understated its ending inventory in the current year by $5,000. The company incorrectly reported net income of $100,000. Determine the effect this error had on the financial statements. Multiple choice question. Cost of goods sold was too low by $5,000, which caused net income to be overstated. Cost of goods sold will be too high by $5,000, and this caused net income to be understated by $5,000. Total assets on the balance sheet will be too high by $5,000. Cost of goods sold will be too high by $5,000, and this caused net income to be overstated by $5,000.
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Cake Mart understated its ending inventory in the current year by $5,000. The company incorrectly re...
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