The effect of overstating revenue expenditure in the profit and loss account is that the

The effect of overstating revenue expenditure in the profit and loss account is that the

  • A.
    opening stock will be increased
  • B.
    net profit will be understand
  • C.
    net profit will be overstead
  • D.
    opening stock will be decreased
Correct Answer: Option B
Explanation

 As a general rule, an increase in any type of business expense lowers profit. overstating expenditure would decrease or understate the net profit

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