Multiple choice

Overvaluation of opening stock will result in

  1. overstatement of profits

  2. understatement of profits

  3. overstatement of current assets at the end

  4. understatement of direct expenses
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The overvaluation of opening stock will show lesser profits. Overstatement of closing stock will show higher profits.

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