If the Purchase of Shop Fitting for £25,000 Is Included

Multiple Choice

If the purchase of shop fitting for £25,000 is included in the cost of sales, then:

A) Gross profit ONLY will be understated by £25,000.
B) Gross profit ONLY will be overstated by £25,000.
C) Net profit ONLY will be understated by £25,000.
D) Both gross profit and net profit will be understated by £25,000.