Effect of inventory errors
Let's consider the effect of inventory errors. Please assume that it is discovered in 2005 that ending inventory from 2003 is understated. What accounts will be affected by this understatement and how will they be affected?
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If no new debt was issued during the year, the cash flow to creditors is $ and the cash flow to stockholders is $.Interpret and explain the positive and negative signs of your answers in a) and d)
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