Question 5 Not yet answered Marked out of 1.00 4. C11. Ah Beng runs a small busi

Question

Question 5 Not yet answered Marked out of 1.00 4. C11. Ah Beng runs a small business. It has an accounting year ending on 31 May. At 31 May 2013, there were goods on sale or return which cost RM1,000 that had been treated as credit sales during the year at a selling price of RM1,500 Which of the following statements about the accounts for the year ended 31 May Flag question 2013 is not true Select one O a. The profit for the year is overstated by RM1,500 O b. The value of debtors at 31 May 2013 is overstated by RM1,500 O c. The amount of sales for the year is overstated by RM1,500 O d. The value of stock at 31 May 2013 is understated by RM1,000

Explanation / Answer

1)correct option is A" -

If no entry for is made for sales return ,The sales return and cost of sales entry is not made ,profit will be overstated by 1500-1000 = 500

2)Correct option is " D"

Correct Profit : Wrong Profit -revenue receipts +revenue expense

          25000 - 5000+4000

              = 24000

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