O-LevelAccountingPreparation of financial statements7707/12 · May/June 2020 · Q201 Mark
Joel's inventory on 31 December 2019 was valued at $4800. It was discovered that: 1 Goods, cost $100, had not been included. 2 Goods, cost $170, had been included at net realisable value $210. What was the effect of the incorrect inventory valuation on Joel's financial statements at 31 December 2019? profit for $ inventory $ equity $ the year A overstated 40 understated 40 nil B overstated 60 understated 60 nil C understated 40 understated 40 understated 40 D understated 60 understated 60 understated 60
Aoverstated 40 understated 40 nil
Boverstated 60 understated 60 nil
Cunderstated 40 understated 40 understated 40
Dunderstated 60 understated 60 understated 60
✓ Correct answer
D: understated 60 understated 60 understated 60
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill Preparation of financial statements and see which topics are most likely to come up next.
Sign up free →