O-LevelAccountingPreparation of financial statements7707/11 · Oct/Nov 2015 · Q181 Mark
Alice took goods for her own use but did not enter this in her accounting records. She made an adjustment for these goods in the year-end financial statements. How did this adjustment affect the gross profit and the closing capital?
Agross profit: increase ✓
Bgross profit: decrease ✓, closing capital: decrease ✓
Cclosing capital: decrease ✓
Dclosing capital: no effect ✓
✓ Correct answer
B: gross profit: decrease ✓, closing capital: decrease ✓
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