We can also do an analysis of beginning inventory errors. The income statement effects are the opposite of those for end inventory
Balance sheet effects
Balance sheet effects of an inventory error can be seen by considering the accounting equation: assets = liabilities + equity. For example, understating ending inventory under states both current and total assets. An under statement in ending inventory also shows the effects of inventory errors on the current period's balance sheet amounts. Errors in beginning inventory do not yield misstatements in the end-of-period balance sheet, but they do affect that current period's income statment.