(a)[8]
Complete the table so that it shows the effect of each error on the profit for the year and on working capital at 30 June 2020. Write ‘understated’, ‘overstated’ or ‘no effect’.
(b(i))[2]
Suggest two reasons for the differences in the current ratio.
(b(ii))[2]
Suggest two reasons for the differences in the liquid (acid test) ratio.
(b(iii))[2]
Suggest two reasons for the differences in the return on capital employed (ROCE).
(c)[1]
Suggest one reason for this difference.
(d)[5]
Advise Nazim whether or not he should introduce this strict credit control policy. Justify your answer by giving two advantages and two disadvantages.