The following accounts contain errors:
■ Rent account
■ Mortgage account
■ Insurance account
■ Drawings account
■ Advertising account
■ Returns outward
■ Carriage outward
■ Purchases account.

Required

Complete the table showing changes to gross profit and net profit when corrections are made.

After any errors are discovered:
■ The journal should be used to effect the changes
■ The ledger accounts should be corrected
■ Gross profit should be adjusted
■ Net profit should be adjusted, and
■ Changes to balance sheet items should be made

Transcribed Image Text:

Account Rent account Mortgage account Insurance account Drawings account Advertising account Returns outward account Carriage outward account Purchases account Gross profit Net profit