1
After preparing its draft final accounts for the year ended 31 March 2006 and its draft
balance sheet as at 31 March 2006 a business discovered that the stock lists used to compute the
value of stock as at 31 March 2006 contained the following entry:
Stock item Number Cost per unit Total cost
Y 4003 100 £1.39 £1,390
Required:
(a) What is wrong with this particular entry?
(b) What would the effect of the error have been on
(i
) the value of stock as at 31 March 2006?
(ii
) the cost of goods sold for the year ended 31 March 2006?
(iii
) the net profit for the year ended 31 March 2006?
(iv) the total for Current Assets as at 31 March 2006?
(v) the Owner’s Capital as at 31 March 2006?
(Association of Accounting Technicians)