Accounting for IGCSE & O level - Accounting Procedures (Section 9 - No. 39)
What will happen to the revenue and profit if the revenue receipt is recorded as a capital receipt?
Revenue and profit will be unaffected.
Revenue and profit will be understated.
Revenue and profit will be overstated.
Revenue will be understated and profit will be unaffected.
Explanation
If revenue receipt is recorded as capital, the business underestimates the revenue and the profit.
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