Regarding WIP production orders that have not been closed ou

Regarding WIP production orders that have not been closed out properly (WIP overstated) over several years, how will the below entry, to correct the issue, affect the financials?

Debit: Finished Goods

       Credit: WIP

Solution

Overstatement in WIP is to be reversed to cost of goods sold.

As inventory is overstated, overstatement should be reversed to cost of goods sold there by reducing the cost.