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If an income was recorded twice by mistake, what is the effect on profit?

Answer and explanation

Correct answer: Profit was overstated

Recording an income twice increases total revenue above the true amount, so profit is overstated by the extra amount. The correction requires deducting the duplicated income. Options A and C are incorrect because double-recording an income cannot understate profit or leave it unchanged — it increases profit. Exam tip: when checking accounts, always verify individual income entries for duplicates before finalizing profit figures.

Related tags

Partnership AccountsAdjustmentsIncome ErrorProfit OverstatementError CorrectionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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