Accounting for IGCSE & O level - Accounting Procedures (Section 8 - No. 38)
If the repairs were incorrectly debited to the premises account, what is the effect on the financial statements?
Expenses understated, Profit overstated, Non-current assets overstated.
Expenses overstated, Profit understated, Non-current assets overstated.
Expenses overstated, Profit overstated, Non-current assets unaffected.
Expenses understated, Profit understated, Non-current assets unaffected.
Explanation
Expenses are overstated, so profit is understated, and non-current assets are overstated.
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