Accounting for IGCSE & O level - Advanced Principles (Section 3 - No. 20)
What would be the effect on a company's profitability and financial position if the value of its inventory is incorrect?
It would have no impact.
It could be misleading.
It always improves profitability.
It always makes it seem worse than it is.
Forklaring
The profitability, liquidity and financial position of a business will be misleading if the value of its inventory is incorrect.