Analyzing Impact of Inventory Errors on Accounts

The following table has six separate descriptions of inventory errors assuming the use of a periodic inventory system.

Inventory Error	Cost of Goods Sold	Pretax Income	Ending Inventory
a. Ending inventory overstated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect
b. Ending inventory and purchases overstated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect
c. Ending inventory understated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect
d. Ending inventory and purchases understated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect
e. Beginning inventory overstated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect
f. Beginning inventory understated	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect	OverstatedUnderstatedNo effect