Question

if closing stock is undervalued what is the effect on net profit

Answer 1

Answer:

Now, when closing stock is under-valued it means Trading A/c will give lower gross profit and Profit and Loss A/c will give lower net profit. ... Now, when opening stock is under-valued it means Trading A/c will give inflated gross profit and Profit and Loss A/c will give inflated net profit.

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Answer 2

Answer:

Now, when closing stock is under-valued it means Trading A/c will give lower gross profit and Profit and Loss A/c will give lower net profit. ... Now, when opening stock is under-valued it means Trading A/c will give inflated gross profit and Profit and Loss A/c will give inflated net profit.

Explanation:

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