When closing stock is overstated, it would reduce,
Cost of sales and increase gross profit
Gross profit and increase cost of sales
Purchases and increases sales
Sales and increase purchases
Correct answer is B
When closing stock is overstated, the cost of goods available for sale will be high and the gross profit low. The higher the cost of sales, the lower the gross profit.
Bulk purchases
Prompt payment
Quick delivery
Cash payment
Correct answer is B
A trade discount represents the reduction in cost of goods or services sold in the business environment. Trade discounts can help small businesses save money when purchasing goods or services from suppliers. Many suppliers require small businesses to pay within a specific time frame to receive the trade discount.
One of the main reasons why firms offer trade discounts is to encourage debtors to clear their outstanding balances quickly.
The objectively of accounting information is enable users to
Prepare the financial statements
Value stock
Make decisions
Prepare budgets
Correct answer is C
No explanation has been provided for this answer.
A trading account is prepared to disclose the
Net profile or loss for the year
Gross profit or loss for the year
Accumulated fund for the year
Gross profit on manufacturing
Correct answer is B
The purpose of the profit and loss account is to: Show whether a business has made a PROFIT or LOSS over a financial year. It describe how the profit or loss arose – e.g. categorizing costs between “cost of sales” and operating costs.
A statement showing a trader's financial position as at a particular date is an
Trading account
Profit and loss account
Balance sheet
Appropriation account
Correct answer is C
A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.