07-24-2007, 06:43 PM
Dear Brother Due to overstatement of Purchases Cost of Sales Increases and due to which Gross Profits and Net Profits Both Decreased by 50,000....
Stationary which is an Expense instead it had added to closing stock due to which Cost of sales decreased by 10,000 and so Gross Profits and Net Profits both Increased by 10,000.....
So 50,000 Decreament and 10,000 Increament Results to be overall 40,000 Decreament in<b> OF GROSS PROFITS</b>.....
Now Stationary Expense is also understated by 10,000 due to which Net Profits are OverStated by 10,000....thus, 40,000 Decreament in Gross Profits and 10,000 UnderStatement of Expenses Results in 40,000 Decreased GP which is also having an impact on NP and so by 10,000 Net Profits also Overstated....so 40,000-10,000=>30,000 Understatement of NP....
Kits may have wrong options
Stationary which is an Expense instead it had added to closing stock due to which Cost of sales decreased by 10,000 and so Gross Profits and Net Profits both Increased by 10,000.....
So 50,000 Decreament and 10,000 Increament Results to be overall 40,000 Decreament in<b> OF GROSS PROFITS</b>.....
Now Stationary Expense is also understated by 10,000 due to which Net Profits are OverStated by 10,000....thus, 40,000 Decreament in Gross Profits and 10,000 UnderStatement of Expenses Results in 40,000 Decreased GP which is also having an impact on NP and so by 10,000 Net Profits also Overstated....so 40,000-10,000=>30,000 Understatement of NP....
Kits may have wrong options
