Question on: WAEC Accounting - 2012
When closing stock is overstated, it would reduce,
A
cost of sales and increase gross profit
B
gross profit and increase cost of sales
C
purchases and increases sales
D
sales and increase purchases
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Correct Option: 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
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