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 I     ncreased 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

C

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