O-LevelAccountingAccounting principles and policies7707/11 · May/June 2024 · Q191 Mark
At the end of the financial year Cindy valued her inventory at cost. This valuation incorrectly included damaged goods costing $300. Cindy estimated these goods could be sold for $100. What is the effect of correcting the inventory valuation?
Adecreases by $200 decreases by $200 decreases by $200
Bdecreases by $300 decreases by $300 decreases by $300
Cincreases by $100 increases by $100 increases by $100
Dincreases by $200 increases by $200 increases by $200
✓ Correct answer
A: decreases by $200 decreases by $200 decreases by $200
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