O-LevelAccountingPreparation of financial statements7707/12 · May/June 2022 · Q161 Mark

After the financial statements for the year ended 30 April 2022 had been prepared, a trader discovered that the closing inventory had been over-valued. What will be the effect of this error?

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Aoverstated overstated understated

Boverstated understated no effect

Cunderstated no effect no effect

Dunderstated understated overstated

✓ Correct answer

A: overstated overstated understated

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Topic: Preparation of financial statements, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2022 Paper 1 Variant 2, question 16.

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After the financial statements for the year ended 30 April 2022 had been prepared, a trader discovered that the closing inventory had been over-valued. What will be the effect of this error?

✓ Correct answer

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