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The draft financial statements of Galahad’s business for the year ended 31 July 20X0 show a profit of $54250 prior to the correction of the following errors: 1.Cash drawings of $250 have not been accounted for 2.Debts amounting to $420, which were provided against in full during the year, should have been written off as irrecoverable
3.Rental income of $300 has been classified as interest receivable A 53580 B 53830 C 54250 D 55130
Correct answer is C..But my answer is B because of $420 irrecoverable ecpense..Sir, why $420 expense doesnt affect to the profit as correct answer is C?
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