After preparing its draft final accounts for the year ended 31 August 22Y0 and its draft balance
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Question:
After preparing its draft final accounts for the year ended 31 August 22Y0 and its draft balance sheet as at 31 August 22Y0, DEF Enterprises discovered an error in the stock lists used to compute stock value as at 31 August 22Y0. The entry was:
Stock item | Number | Cost per unit | Total cost |
S123 | 100 | £5.40 | £540 |
Required: (a) Describe the error in this entry. (b) Evaluate the impact of this error on: (i) the stock value as at 31 August 22Y0. (ii) the cost of goods sold for the year ended 31 August 22Y0. (iii) the net profit for the year ended 31 August 22Y0.
Related Book For
Frank Woods Business Accounting Volume 1
ISBN: 9780273681496
10th Edition
Authors: Frank Wood, Alan Sangster
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