How does an ending inventory error in the first year affect the beginning inventory of the second year?

• A. The ending inventory error is adjusted through sales in the second year.
• B. The ending inventory error directly becomes the beginning inventory error in the second year.
• C. The ending inventory error is corrected and does not affect the beginning inventory of the second year.
• D. The ending inventory error is adjusted through purchases in the second year.

Answer: (B)