Accounting for IGCSE & O level - Accounting Procedures (Section 15 - No. 40)
If advertising expenses were understated by £300 and sales were understated by £300. Which of the following is the impact to the draft profit and the statement of financial position?
Profit will be understated
Profit will be overstated
Expenses understated by £300
Capital is unaffected
Explanation
If expenses and sales are understated, the profit will be understated, capital will be unaffected.
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