goods purchased $490 has been sold on credit to maxtor for $918.No record of the sale has been made in the accounts.
how and by how much would it increase/decrease the profit?
reason?
help with this?
Since you didn't record in your sales account, it means that your Trading a/c will have less revenue. Remember, the sale item in your Trading a/c includes:
Cash sales + Credit sales = Total sales.
Sales = Revenue.
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If revenue decrease, the profit will also reduce. This is the positive relationship.
If expense increase, the profit on contrary will decrease. This is the negative relationship.
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By how much? $428, because it's the net revenue earned. So there will be a decrease of profit.
[correct me if there are errors]