When closing stock is overstated, it would reduce,
...When closing stock is overstated, it would reduce,
Cost of sales and increase gross profit
Gross profit and increase cost of sales
Purchases and increases sales
Sales and increase purchases
Correct answer is B
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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UCHENNA ENTERPRISES: Balance sheet as at 31st December, 1993 \(\begin{array}{c|c} & N & N &a...