Correcting overstated expenses increases profit Steps:

• Error 1 overstates expenses by $500 (discount allowed is not an expense); correction reduces expenses by$500, increasing profit by $500.
• Error 2 overstates expenses by $300 (rental income is not an expense); correction reduces expenses by$300, increasing profit by $300.
• Error 3 misclassifies wages (an expense) as rental expense (also an expense); total expenses unchanged, no effect on profit.
• Net effect: profit increases by $500 +$300 = $800.

Why D is correct:

• The sum of overstated expenses from errors 1 and 2 ($800) is reversed, directly increasing net profit per the accounting equation (Profit = Revenue - Expenses).

Why the others are wrong:

• A: Ignores error 2's $300 impact.
• B: Reverses the direction; corrections reduce expenses, increasing profit.
• C: Ignores error 2's $300 impact.

Final answer: D