A-LevelAccountingReconciliation and verification9706/12 · May/June 2016 · Q121 Mark
The directors of a company are completing the financial statements for the year ended 30 April 2016. They discover that the inventory at 1 May 2015 was over-valued by $50000. What are the effects of correcting this error?
Aprofit for the year ended 30 April 2016: decrease, retained earnings brought forward at 1 May 2015: decrease
Bprofit for the year ended 30 April 2016: decrease, retained earnings brought forward at 1 May 2015: increase
Cprofit for the year ended 30 April 2016: increase, retained earnings brought forward at 1 May 2015: decrease
Dprofit for the year ended 30 April 2016: increase, retained earnings brought forward at 1 May 2015: increase
✓ Correct answer
C: profit for the year ended 30 April 2016: increase, retained earnings brought forward at 1 May 2015: decrease
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