- 1 Marks
Question
The effect of the error on the financial statements, if not detected, would include the following EXCEPT:
A. The purchases in the financial statements will be overstated.
B. The inventory of the outfit will be understated.
C. The profit of the outfit will be understated.
D. The non-current assets account will be understated.
E. The inventory will be overstated.
Answer
Answer: E
Explanation:
This type of error would affect the purchases, profit, and non-current asset values but not the inventory. Hence, option E is incorrect.
- Tags: Error Correction, Financial Statements, Non-current Assets
- Level: Level 1
- Topic: Correction of errors
- Series: MAY 2015
- Uploader: Kwame Aikins