A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2019 · Q111 Mark
A company undervalued the closing inventory for its current accounting period. How did this affect gross profit?
Acurrent period no effect, following period no effect
Bcurrent period understated, following period overstated
Ccurrent period understated, following period no effect
Dcurrent period understated, following period understated
✓ Correct answer
B: current period understated, following period overstated
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