Accounting for IGCSE & O level - Final Statements (Section 1 - No. 24)

What is the effect of a higher inventory valuation on a company's financial statements?

Higher Cost of Goods Sold (COGS)

Higher Gross Profit

Higher Current Assets

Higher Equity

Higher inventory valuation leads to lower COGS (because higher costs are still in inventory), increasing gross profit, assets, and equity.