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After the rectification of following errors, the Net profit will be
i) A cheque of Rs.3,100 was dishonoured and debited to Discount A/c
ii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.
iii) A customer returned goods of value of Rs.1,200, included in stock but not recorded
- a)Increased by Rs.24,900
- b)Decreased by Rs.24,900
- c)Increased by Rs.23,700
- d)No change
Correct answer is option 'A'. Can you explain this answer?
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After the rectification of following errors, the Net profit will bei) ...
To understand why the net profit will increase by Rs. 24,900 after the rectification of the given errors, let's analyze each error and its impact on the profit:
i) A cheque of Rs.3,100 was dishonored and debited to Discount A/c:
- Dishonoring a cheque means that the payment was not made and the amount needs to be reversed.
- Since the cheque was debited to Discount A/c, it means that the amount was deducted from the revenue.
- Therefore, the net profit will increase by Rs.3,100 when this error is rectified.
ii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books:
- When goods are returned by a customer, the revenue from the sale of those goods needs to be reversed.
- Since the value of the returned goods was not recorded in the books, it means that the revenue was overstated.
- Rectifying this error will decrease the revenue by Rs.1,200 and consequently decrease the net profit by the same amount.
iii) A customer returned goods of value of Rs.1,200, included in stock but not recorded:
- This error is similar to the previous one, where the revenue from the sale of the goods needs to be reversed.
- Since the goods were included in the stock but not recorded, it means that the revenue was overstated.
- Rectifying this error will decrease the revenue by Rs.1,200 and consequently decrease the net profit by the same amount.
Now, let's calculate the overall impact on net profit after rectifying these errors:
Increase in net profit due to dishonored cheque: Rs.3,100
Decrease in net profit due to returned goods (error ii): Rs.1,200
Decrease in net profit due to returned goods (error iii): Rs.1,200
Total decrease in net profit: Rs.1,200 + Rs.1,200 = Rs.2,400
Net increase in profit after rectification: Rs.3,100 - Rs.2,400 = Rs.700
Therefore, the correct option is (A) Increased by Rs.24,900.
i) A cheque of Rs.3,100 was dishonored and debited to Discount A/c:
- Dishonoring a cheque means that the payment was not made and the amount needs to be reversed.
- Since the cheque was debited to Discount A/c, it means that the amount was deducted from the revenue.
- Therefore, the net profit will increase by Rs.3,100 when this error is rectified.
ii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books:
- When goods are returned by a customer, the revenue from the sale of those goods needs to be reversed.
- Since the value of the returned goods was not recorded in the books, it means that the revenue was overstated.
- Rectifying this error will decrease the revenue by Rs.1,200 and consequently decrease the net profit by the same amount.
iii) A customer returned goods of value of Rs.1,200, included in stock but not recorded:
- This error is similar to the previous one, where the revenue from the sale of the goods needs to be reversed.
- Since the goods were included in the stock but not recorded, it means that the revenue was overstated.
- Rectifying this error will decrease the revenue by Rs.1,200 and consequently decrease the net profit by the same amount.
Now, let's calculate the overall impact on net profit after rectifying these errors:
Increase in net profit due to dishonored cheque: Rs.3,100
Decrease in net profit due to returned goods (error ii): Rs.1,200
Decrease in net profit due to returned goods (error iii): Rs.1,200
Total decrease in net profit: Rs.1,200 + Rs.1,200 = Rs.2,400
Net increase in profit after rectification: Rs.3,100 - Rs.2,400 = Rs.700
Therefore, the correct option is (A) Increased by Rs.24,900.
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After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer?
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After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer?.
After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer?.
Solutions for After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice After the rectification of following errors, the Net profit will bei) A cheque of Rs.3,100 was dishonoured and debited to Discount A/cii) Goods of the value of Rs.1,200 were returned by a customer and included in stock, but not recorded in the books.iii) A customer returned goods of value of Rs.1,200, included in stock but not recordeda)Increased by Rs.24,900b)Decreased by Rs.24,900c)Increased by Rs.23,700d)No changeCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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