The effect of overstating revenue expenditure in the profit and loss account is that the...
FINANCIAL
JAMB 2016
The effect of overstating revenue expenditure in the profit and loss account is that the
- A. opening stock will be increased
- B. net profit will be understand
- C. net profit will be overstead
- D. opening stock will be decreased
Correct Answer: B. net profit will be understand
Explanation
As a general rule, an increase in any type of business expense lowers profit. overstating expenditure would decrease or understate the net profit
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