Accounting for IGCSE & O level - Accounting Procedures (Section 27 - No. 34)
What is the impact on the profit if an expense of $1,500 was not recorded in the books?
Profit would be overstated by $1,500.
Profit would be understated by $1,500.
Profit would be unaffected.
The effect on profit cannot be determined.
Explanation
If an expense is not recorded, the profit is overstated because expenses reduce profit.
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