Which of the following statements is FALSE if ending inventory is UNDERSTATED in year one?

As long as the ending inventory in the second year is correctly stated, the error in year one will "wash itself out" after two years.

Over a two year period, the net income of the two indivdual years will be wrong. however the total combined net income for the two years will be correct.

The beginning Inventory of year two will be incorrect.

Cost of Goods Sold in year one would be understated.