overstatement- making something seem more important than it really is. Synonyms: exaggeration, magnification. Antonym: understatement.
An overstatment of year-end inventory results in an increase in the gross margin (sales - cost of sales). overstating ending inventroy understates cost of sales
If that happens, there will be overstatment of the period's profit as well as overstatement of assets. This will reduce the future profit of business because the original costs of assets will be charged more to the Profit and Loss account in process of depreciation of assets.
Hmmm. If you don't know what the word means, you surely can't use it in a sentence. Consult a dictionary for the definition. Once you know the meaning, writing a sentence using the word becomes the easy part. It's the ONLY way to learn. ================== If I've said it once, I've said it a million times, "Don't ask such questions."