Which of the following would raise suspicion that a manager may be attempting to overstate net income by falsifying the physical count of ending

inventory?

Multiple Choice

The amount of estimated inventory calculated using the gross margin method was higher than the amount determined by the physical

count.

The amount of estimated inventory calculated using the gross margin method was lower than the amount determined by the physical count.

The amount of estimated inventory calculated using the gross margin method and the amount determined by the physical count were

virtually equal.

The cost of goods sold percentage was virtually the same from one accounting period to the next.