A-LevelAccountingAnalysis and communication of accounting information9706/12 · Oct/Nov 2010 · Q221 Mark
A company's gross profit ratio for the year ended 31 December 2008 was 25%. This increases to 28% for the year ended 31 December 2009. What could have been responsible for the increase?
Aan increase in the cost of purchases during 2009
Ban increase in the volume of sales during 2009
Can over-valuation of inventory (stock) as at 31 December 2009
Dan under-valuation of inventory (stock) as at 31 December 2009
✓ Correct answer
C: an over-valuation of inventory (stock) as at 31 December 2009
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