O-LevelAccountingPreparation of financial statements7707/12 · Oct/Nov 2024 · Q81 Mark
A trader had prepared her year-end financial statements. She later discovered that an adjustment to reduce the provision for doubtful debts by $100 had not been made. How did this error affect the trader's statement of financial position?
Acurrent assets: overstated $100, capital: overstated $100
Bcurrent assets: overstated $100, capital: understated $100
Ccurrent assets: understated $100, capital: overstated $100
Dcurrent assets: understated $100, capital: understated $100
✓ Correct answer
D: current assets: understated $100, capital: understated $100
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