Question

The opening stock is overstated by Rs.10,000 and closing stock is understated by Rs.15,000. The impact on the net profit of the current year is a) Rs.5,000 overstated b) Rs.25,000 overstated c) Rs. 5,000 understated d) Rs.25,000 understated

Answer 1

Answer:

(b) Rs.25,000 overstated

Explanation:

the opening stock is overstated so +10,000 on Dr. side and the closing stock is 15,000+10,000=25,000 , because closing stock is remaining stock of opening stock+purchases