Leslie Ltd Has Found an Error in Its Revenue Account

question 28

Multiple Choice

Leslie Ltd has found an error in its revenue account: an invoice for $3000 was recorded as revenue in 2015 when it should have been recorded in 2016.The company's income tax rate is 40 per cent and there was no corresponding error in cost of goods sold
-Assuming that the dividend is unchanged,what is the effect of the error on retained profits at end of 2016?

• A) It is $1800 too low.
• B) It is $3000 too low.
• C) It is $1800 too high.
• D) There is no effect.

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Definitions:

Bronchial Trees

The network of airways in the lungs, including the trachea, bronchi, and bronchioles.

Alveoli

Little vesicles in the lungs responsible for the transfer of oxygen and carbon dioxide.

Cartilage

A firm, flexible connective tissue found in various forms in the human body such as joints, rib cage, and ear structure.

Distal End

Referring to the end of a limb or structure that is farthest from the point of attachment or the trunk of the body.