In finalizing its draft final accounts for the year ended 31 May 21Y9 and its draft balance sheet as at 31 May 21Y9, YZA Ltd found an error in the stock lists used to compute stock value as at 31 May 21Y9 The entry was Stock item Number Cost per unit Total cost R789 120 4 20 504 Required (a) What is incorrect about this entry (b) Assess the impact of this error on (i) the stock valuation as at 31 May 21Y9 (ii) the cost of goods sold for the year ended 31 May 21Y9 (iii) the net profit for the year ended 31 May 21Y9 (iv) the Owners Equity as at 31 May 21Y9

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Question: In finalizing its draft final accounts for the year ended 31 May 21Y9 and its draft balance sheet as at 31 May 21Y9, YZA Ltd

In finalizing its draft final accounts for the year ended 31 May 21Y9 and its draft balance sheet as at 31 May 21Y9, YZA Ltd found an error in the stock lists used to compute stock value as at 31 May 21Y9. The entry was:

Stock item	Number	Cost per unit	Total cost
R789	120	£4.20	£504

Required: (a) What is incorrect about this entry? (b) Assess the impact of this error on: (i) the stock valuation as at 31 May 21Y9. (ii) the cost of goods sold for the year ended 31 May 21Y9. (iii) the net profit for the year ended 31 May 21Y9. (iv) the Owner’s Equity as at 31 May 21Y9.

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