Goods worth 1,750 returned to a supplier are wrongly entered in the sales returns book as 1,570. What is the effect?
Correct answer B. Gross profit will decrease by 3,320
Explanation
Omitting the purchase return overstates purchases by 1,750, and the false sales return understates net sales by 1,570, so gross profit falls by 1,750 + 1,570 = 3,320.
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