O-LevelAccountingAccounting principles and policies7707/12 · Oct/Nov 2021 · Q161 Mark
After preparing draft financial statements at the end of her first year of trading, Lucy discovered two errors. 1 Damaged inventory had been valued at cost price, $340. It was expected to sell for $180. 2 100 items which had been expected to sell for $12 each had been valued at their cost price of $7 each. Carriage inwards of $1 for each item had not been included in the cost. What was the effect of these errors on the gross profit?
Aoverstated $60
Boverstated $240
Cunderstated $60
Dunderstated $240
✓ Correct answer
A: overstated $60
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