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 Goods purchased from A for Rs.10,000 passed through the sales book. The error will result in
  • a)
    Increase in gross profit.
  • b)
    Decrease in gross profit.
  • c)
    No effect on gross profit.
  • d)
    Either (a) or (b).
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Goods purchased from A for Rs.10,000 passed through the sales book. Th...
  • When goods purchased are incorrectly recorded in the sales book, it means that a purchase transaction has been treated as a sale. This results in:
    • Understating purchases, which reduces the cost of goods sold (COGS).
    • Overstating sales, which increases the total revenue.
    As a result, the gross profit will increase because the cost of goods sold is lower, and sales revenue is higher than they should be. Thus, the error incorrectly inflates the gross profit.
So, the error will lead to an increase in gross profit.
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Community Answer
Goods purchased from A for Rs.10,000 passed through the sales book. Th...
Increase in gross profit.
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Goods purchased from A for Rs.10,000 passed through the sales book. The error will result ina)Increase in gross profit.b)Decrease in gross profit.c)No effect on gross profit.d)Either (a) or (b).Correct answer is option 'A'. Can you explain this answer?
Question Description
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