Accounting for IGCSE & O level - Accounting Procedures (Section 23 - No. 36)
What effect does the error of original entry recorded in the purchase journal for £16,934 instead of £16,499 have on the draft profit?
Profit is understated by £435
Profit is overstated by £435
Profit is understated by £16,934
Profit is overstated by £16,934
Explanation
Since Purchases were overestimated, it caused profits to be overstated.
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