A sales of Rs 2,000 wrongly entered in the purchase book leads to a correction in which of the following?

Decreases the gross profit by Rs. 2,000.

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Increases the gross profit by Rs. 2,000.

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Increases the gross profit by Rs. 4,000.

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None of the above

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Solution

The correct option is A Decreases the gross profit by Rs. 2,000.
A sale of Rs.2000 recorded in purchase book would result an overall reduction in gross profit by Rs.4000, as sales is under cast by Rs.2000 and purchase is over cast by Rs.2000.

Suggest Corrections

Similar questions

Rectify the following errors by passing entries:

(i) Rs.2,000 received from Ramesh wrongly entered as from Suresh.

(ii) The purchase Book was under cast by Rs.300.

(iii) Total of Sales return was under cast by Rs.500

Prepare Trial Balance from the following information :

Prepaid Expenses Rs. 5,000, Profit & Loss A/c (Profit) Rs. 8,000, Outstanding Rent Rs. 2,000, Bad Debts Recovered Rs. 4,000, Interest on Investment Rs. 1,000, Due to Mohan Rs. 5,000, Bank overdraft Rs. 2,000, Discount Allowed Rs. 800, Due from Vinod Rs. 1,200, Investment Rs. 15,000, Patents Rs.4,000, Machinery Rs.6,000, Capital Rs. 10,000.

Q. Gross Profit Rs 1,20,000, Rent Rs 10,000, Salary Rs 30,000, Commission paid Rs 14,000 Interest on Loan Rs 10,000. Advertising Rs 8,000, Discount received Rs 6,000, Printing & Stationery Rs 4,000, Legal charges Rs 10,000, Bad Debts Rs 2,000, Depreciation Rs 4,000, Interest received Rs 8,000, Loss by life Rs 6,000. The net Profit for the year is :

Rectify the following errors by passing entries:

(i) Credit sale of old furniture to Mohan for 1,500 was posted as 5,100.

(ii) Goods purchased from David Rs.2,000 passed through sales book.

(iii) Sales Book has been totaled Rs.2,000 short.

Q. R sends goods costing Rs.