If a realisation expense that was actually incurred only once is mistakenly recorded twice in the Realisation Account, what will be the effect on the result of the Realisation Account?

Correct answer: Loss will increase

Realisation expenses are debited to the Realisation Account. If the same expense is recorded twice, the debit side becomes higher than the actual amount, so the loss on realisation is overstated. Therefore, profit cannot increase and the error does not have a nil effect. Exam tip: An excess debit of an expense to the Realisation Account generally increases the reported loss.