Accounting for IGCSE & O level - Accounting Procedures (Section 1 - No. 1)
How would the error, where a sales commission of $140 was incorrectly posted as $400, impact the draft profit and require a correction?
Profit is overstated by $260; Debit Suspense, Credit Sales Commission.
Profit is understated by $260; Debit Suspense, Credit Sales Commission.
Profit is overstated by $300; Debit Sales Commission, Credit Suspense.
Profit is understated by $300; Debit Sales Commission, Credit Suspense.
Explanation
Profit is understated by $260, requiring a debit to the suspense account and credit to sales commission.
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