Question

Goods purchased from Mr.X for Rs.10,000 ,passed through the Sales Book. This 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)

Answer 1

Answer: (A)

Increase in gross profit

If the amount of purchase is recorded in sales book then the credit balance

increases hence resulting in increase in Gross Profit.