If an expense is mistakenly recorded twice, what will be the effect on profit?

Correct answer: Profit will be understated

Recording an expense twice increases total expenses recorded. Since profit = income − expenses, higher expenses reduce profit, so profit is understated. Option A is incorrect because doubling an expense does not overstate profit; it reduces it. Options C and D are implausible — the profit will not remain unchanged nor necessarily become zero just from one expense being doubled. Exam tip: to find such errors check the individual expense ledger and compare totals with the trial balance to spot duplicate entries.