5 Which of the following factors could cause a company’s gross profit percentage on sales

5 Which of the following factors could cause a company’s gross profit percentage on sales to fall below the expected

level?

1 Understatement of closing inventories.

2 The incorrect inclusion in purchases of invoices relating to goods supplied in the following period.

3 The inclusion in sales of the proceeds of sale of non-current assets.

4 Increased cost of carriage charges borne by the company on goods sent to customers.

A 3 and 4

B 2 and 4

C 1 and 2

D 1 and 3