Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A business showed a draft profit for the year of $200000. The following points were later found. 1. Depreciation charges had been overstated by $20000. 2. The value of closing inventory had been overstated by $15000. 3. A year-end accrual for wages was needed, $8000. 4. A year-end adjustment for prepaid insurance, $2500, was required. What was the adjusted profit for the year?

  • A$159500
  • B$199500
  • C$240500
  • D$245500

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