A company makes silly clerical errors and in the annual financial statements for the year ended December 31, 2010 understates it beginning inventory for the year by $5,000 and in the same accounting period overstates its ending inventory by $9,000. As a result of these two errors, Cost of Goods Sold reported in the 2010 Income Statement will be:

Multiple Choice

• understated by $14,000

• understated by $9,000

• overstated by $9,000

• overstated by $5,000

• none of the other alternatives are correct