A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2022 · Q91 Mark
A company has produced draft financial statements for the year. It is then discovered that some inventory is damaged and the value must be reduced. What will be the effect?
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Aprofit for the year: decrease; current assets: decrease
Bprofit for the year: decrease; current assets: increase
Cprofit for the year: increase; current assets: decrease
Dprofit for the year: increase; current assets: increase
✓ Correct answer
A: profit for the year: decrease; current assets: decrease
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