Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

In a draft statement of profit or loss, two mistakes were identified. 1. The $6000 profit made on disposing of equipment was recorded as a loss. 2. The $18\,000 depreciation charge for a motor vehicle was not included. What effect did these mistakes have on the draft profit for the year?

  • Aoverstated $6000
  • Boverstated $12\,000
  • Cunderstated $6000
  • Dunderstated $12\,000

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