Correcting accounting errors to revise gross profit Steps:

• Omitted purchase invoice $250 treated as unrecorded credit note: recorded purchases overstated by$250, so adjust by decreasing purchases $250 (increases gross profit$250).
• Sale of $200 debited to Y's account (instead of crediting sales): sales understated by$200, so adjust by increasing sales $200 (increases gross profit$200).
• Sales journal overcast by $100: sales overstated by$100, so adjust by decreasing sales $100 (decreases gross profit$100).
• Net adjustment: +$250 +$200 - $100 = +$350; correct gross profit = $600 +$350 = $950.

Why A is correct:

• Gross profit = sales - cost of goods sold; corrections reverse error effects on these accounts per double-entry principles, yielding $950.

Why the others are wrong:

• B: Overstates sales adjustment by $20 (ignores partial overcast impact).
• C: Assumes omitted invoice increases costs (decreases profit $250 net), missing credit note interpretation.
• D: Understates sales adjustment by $400 (treats sale error as no net gain).

Final answer: A