Leslie Ltd Has Found an Error in Its Revenue Account

question 3

Multiple Choice

Leslie Ltd has found an error in its revenue account: an invoice for $3 000 was recorded as revenue in 2018 when it should have been recorded in 2019. The company's income tax rate is 40 per cent and there was no corresponding error in cost of goods sold. What is the effect of the error on the 2018 net profit?

• A) It is $1 200 too high.
• B) It is $1 800 too high.
• C) It is $3 000 too high.
• D) Profit is not affected.

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Definitions:

Individuals

Refers to the subjects or entities being studied in a statistical or research context.

Mutually Exclusive Events

Two or more events that cannot occur at the same time in any given experiment or real-world situation.

Intersection

The point or set of points where two or more geometric figures, lines, or paths cross each other.

Subjective Method

A method of assigning probabilities on the basis of judgment.