Multiple choice

The purchase book is overcast by Rs. 2,000 and the sales book is undercast by Rs. 3,000. Both the errors are found only after the preparation of final accounts. What amount of profit is to be transferred to the profit and loss adjustment account after rectification of both the errors?

  1. Dr. profit and loss adjustment account by Rs. 2,000

  2. Cr. profit and loss adjustment account by Rs. 3,000

  3. Dr. profit and loss adjustment account by Rs. 5,000

  4. Cr. profit and loss adjustment account by Rs. 5,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The overall impect on profit after rectification of both the errors is an increase of Rs. 5,000, so we need to credit the profit and loss adjustment account.

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