On reviewing the financial statements for the year that ended at 31 December Year 2, the company’s accountant discovers that a sale amounting to £10,000, made on 29 December Year 2 to a credit customer who takes 1 month’s credit, has not been included in the accounting records. What will be the effect on the income statement

(profit and loss account) and statement of financial position (balance sheet) when this omission is rectified?

(a) Turnover will increase by £10,000 and trade payables (creditors) will increase by £10,000.

(b) Cost of sales will decrease by £10,000 and trade payables (creditors) will increase by £10,000.

(c) Turnover will increase by £10,000 and trade receivables (debtors) will increase by £10,000.

(d) Cash will increase by £10,000 and trade receivables (debtors) will increase by £10,000.