The Statement of Financial Position (Balance Sheet) under current assets
Expense
The Income Statement under expenses
Both gross profit & profit will be overstated (as cost of sales will be understated)
Which financial statement is the provision for doubtful debts recorded in?Which financial statement is bad debts recorded in?Is an increase in the provision for doubtful debts an income or expense?How is profit affected when closing inventory (stock) is overvalued?