Adjustments to income statement

Question 1

How will an increase in a source of income affect profit? e.g discount received

Answer 1

Profit will increase

Question 2

How will an increase in expenses affect profit? e.g accrued expenses

Answer 2

Profit will decrease

Question 3

How will an increase in closing inventory affect profit?

Answer 3

Increase profit

Question 4

Why do some items not effect profit?

Answer 4

Because they only affect the statement of financial position.