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Your new accountant did not know how to calculate cost of goods sold under the periodic inventory system. Instead of using beginning inventory plus purchases minus ending inventory when calculating cost of goods sold, the accountant used beginning inventory plus purchases minus sales. Assume that sales revenue was larger than the ending inventory. What was the impact of this error on the Income statement?


Cost of Goods Sold is overstated


Gross Profit is overstated


Sales Revenue is overstated


Net Income is not affected

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