Accounting for IGCSE & O level - Accounting Procedures (Section 10 - No. 39)
What will be the impact if a company has understated the value of the non-current assets?
The owner's equity will decrease.
The owner may be enabled to fund the business more.
It will create a negative impact on the profit.
The value of the assets will be more than the original price.
Explanation
Understating the assets will affect the depreciation expenses which in turn will affect the profit.
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