In the process of finalizing its draft accounts for the year ended 30 April 24Y5 and its draft balance sheet as at 30 April 24Y5, ABC Ltd identified an error in the stock lists used to compute stock value as at 30 April 24Y5 The entry was Stock item Number Cost per unit Total cost R678 150 4 60 690 Required (a) What is incorrect about this entry (b) Explain the impact of this error on (i) the stock value as at 30 April 24Y5 (ii) the cost of goods sold for the year ended 30 April 24Y5 (iii) the net profit for the year ended 30 April 24Y5

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Question: In the process of finalizing its draft accounts for the year ended 30 April 24Y5 and its draft balance sheet as at 30 April 24Y5,

In the process of finalizing its draft accounts for the year ended 30 April 24Y5 and its draft balance sheet as at 30 April 24Y5, ABC Ltd identified an error in the stock lists used to compute stock value as at 30 April 24Y5. The entry was:

Stock item	Number	Cost per unit	Total cost
R678	150	£4.60	£690

Required: (a) What is incorrect about this entry? (b) Explain the impact of this error on: (i) the stock value as at 30 April 24Y5. (ii) the cost of goods sold for the year ended 30 April 24Y5. (iii) the net profit for the year ended 30 April 24Y5.

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