Accounting for IGCSE & O level - Accounting Procedures (Section 8 - No. 10)

What is the effect of omitting the recording of drawings on the draft profit and financial position?
Profit is unaffected; Capital is understated.
Profit is understated; Capital is unaffected.
Profit is overstated; Capital is understated.
Profit is understated; Capital is understated.

Explanation

Profit is unaffected; Capital is understated.

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