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Why does an inventory error affect two periods?

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Question ajoutée par Ahmed Hassanin CMA , Financial Planning and Controlling Manager , Methode Electronics
Date de publication: 2015/07/09
Utilisateur supprimé
par Utilisateur supprimé

Inventory error affect two periods because the closing inventory of one accounting period will serve as the opening inventory in the next accounting period hence any error in the closing inventory will surely affect the opening inventory of the next period as well as cost of sales or goods sold.

Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

Agree with all answers thank you

Vaiyapuri Gopalakrishnan
par Vaiyapuri Gopalakrishnan , Manager - After Sales , M/s Saud Bahwan Automotive llc

An inventory error affects two periods because1) the ending inventory of one period will become the beginning inventory for the following period, and2) the calculation of the cost of goods sold is beginning inventory + purchases – ending inventory.

lakshminarasimham mallareddi
par lakshminarasimham mallareddi , Manager Finance & Accounts , M/s. Vandana Global Limited, Raipur, Chhattisgarh

Inventory error effect two accounting periods one is for closing another one is for opening.

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