How does correcting an inventory error in the second year lead to equalization of cost of goods sold over two years?

• A. The correction decreases the cost of goods sold in the second year, leading to a permanent discrepancy.
• B. The correction reverses the impact of the first year's error, balancing the total cost of goods sold over two years.
• C. The correction has no impact on the cost of goods sold over two years.
• D. The correction increases the cost of goods sold in the second year, leading to a permanent discrepancy.

Answer: (B)