I tried the first choice as (Net Income Will Be Understand) :

Ending Ending Inventory Inventory Accurate Overstated Begininning Inventory \"$5,000 $5,000 Plus Purchases 3,000 3,000 =Cost of Goods Available for Sale 8,000 8,000 Less Ending lnvetory 4,000 5,000 = Cost of Goods Sold $4,000 $3,000 Ending Ending Inventory Inventory Accurate Overstated Sales $7,000 $7,000 Cost of Goods Sold 4,000 3,000 Gross Margin $3,000 $4,000 4305 p .19 . 2:25/e:45 If the amount of ending inventory is overstated, the amount of Multiple Choice 0 net income will be understated. liabilities will be overstated. cash flow from operating activities will be overstated. 0 cost of goods sold will be understated