Randwick Plc Has a Year-End of 30 June 2011 B)

question 7

Multiple Choice

Randwick Plc has a year-end of 30 June 2011.During the year the following errors were discovered. - Merchandise inventory at the factory had been understated by €44 000.
- Goods on consignment from a supplier for €13 000 were included in inventory at the shops.
- Physical inventory for one warehouse had a shortage of €58 000.
What is the net effect of above errors in the statement of comprehensive income and statement of financial position (inventory) accounts of Randwick Plc?

• A) \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Increase } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Increase } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Decrease } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Decrease } \\
• \hline
• \end{array}\]

---

Definitions:

Itemized Deduction

Expenses allowed by the IRS that can be subtracted from AGI to reduce taxable income, as opposed to taking a standard deduction.

Credit Cards

Financial instruments issued by banks allowing users to borrow funds to pay for goods and services with the agreement to repay the bank at a later date.

Medical Expense

Expenditures associated with the identification, cure, alleviation, management, or prevention of diseases, along with treatments that influence any aspect or functionality of the body.

Insulin

A hormone produced in the pancreas essential for regulating blood sugar levels, often administered medically to individuals with diabetes.