O-LevelAccountingAccounting principles and policiesOct/Nov 2023Paper 1 Q191 Mark
Ariadne prepares her financial statements to 31 December each year. She valued all her inventory at cost on 31 December 2021, even though some inventory with a cost of $500 had a net realisable value of $350. What was the effect of this error?
AGross profit for the year 2021 was overstated.
BTotal assets at 31 December 2021 were understated.
CProfit for the year 2022 was overstated.
DCapital at 31 December 2022 was understated.
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The correct answer is A. This question tests the candidate's understanding of accounting principles and policies within the Accountingsyllabus. The examiner's mark scheme requires...
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