West Corporation's Year 1 ending inventory was overstated by $20,000; however, ending inventory for Year 2 was correct. Which of the following statements is correct?
A. Retained earnings at the end of Year 2 is overstated.
B. Cost of goods sold for Year 1 is overstated.
C. Cost of goods sold for Year 2 is overstated.
D. Net income for Year 1 is understated.
Answer: C
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How can participative budgeting improve the effectiveness of a company's budgeting process?
What will be an ideal response?