Question

A purchase of rs.49500 from Shiva was recorded in the purchases book as rs.59400, the profit would show________
A) an increase of rs.9900
B) a decrease of rs.9900
C) an increase of rs.59400
D) neither an increase nor a decrease

Answer 1

a decrease of 9900

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Answer 2

The profit would show A) an increase of rs.9900.

Given - Entry

Find - Profit

Solution - As the incorrect entry was increased amount, the purchase book will show profit.

The amount of profit will be calculated by finding the difference in written amounts.

Profit = 59400 - 49500

performing subtraction

Profit = 9900

Hence, the purchase book will show A) an increase of rs.9900.

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