When closing stock is overstated, it would reduce,

Accounts - Principles of Accounts

WAEC 2012

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 Answer: Option B

Explanation

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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When closing stock is overstated, it would reduce,

Correct Answer: Option B

Explanation

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