Accounting for IGCSE & O level - Accounting Procedures (Section 26 - No. 41)
The error where a cash purchase of £45 has been omitted, what will be the consequence for the draft profit and financial position?
No impact
Expenses are understated by £45, capital overstated by £45
Expenses are understated by £45, capital understated by £45
Expenses are overstated by £45, capital understated by £45
Explanation
Omission of this purchase will affect both the trial balance and the balance sheet, however, there will be no impact on profit.
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