O-LevelAccountingVerification of accounting records7707/11 · Oct/Nov 2015 · Q281 Mark

A trader overvalued his year-end inventory. Which statements are correct? 1 Current assets are understated. 2 Current liabilities are understated. 3 Gross profit is overstated. 4 Profit for the year is overstated.

A1 and 3

B2 and 3

C2 and 4

D3 and 4

✓ Correct answer

D: 3 and 4

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Topic: Verification of accounting records, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2015 Paper 1 Variant 1, question 28.

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