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1. Explain the effect on income and financial position if (a) the amount of accrued expense were to be underestimated and (b) the inventory
1. Explain the effect on income and financial position if (a) the amount of accrued expense were to be underestimated and (b) the inventory at the year-end omitted inventory held in a customs warehouse awaiting clearance. 2. Explain why two companies carrying out identical trading transactions could produce different gross profit figures.
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Question 1 Part a If the amount of accrued expense were to be underestimated it would result in a lower income and a worse financial position This is because when expenses are accrued they are not yet ...
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
