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How is net profit for the current year is overstated, if closing stock is overstated?


Niyantra M

Niyantra M

CA Foundation

220

20-Jan-20 07:22

82

Answers (2)

if closing stock worth 10 000 is over stated as 20 000.....then there is an unnecessary credit of extra 10 000 in the trading account.....if there is an extra credit in the trading accout....the net profit will be obviously increased


jsome jsome

jsome jsome

CA Inter

525

20-Jan-20 12:41

Draw a trading account and just increase the closing stock. You will figure out why it increases.


Suraj Lakhotia

Suraj Lakhotia

Admin

20-Jan-20 19:46