On 1 April 2019, the business showed a provision for doubtful debts of $3400. An examination of trade receivables on 31 March 2020 was as follows: Amounts and the provision required: - $50000: nil - $40000: $5\%$ - $1600: $20\%$ In the year, an irrecoverable debt of $3000 had been written off in the customer’s account, although no entry was recorded in the income statement. No entry had been recorded for either the rise or the fall in the provision for doubtful debts. For the year ended 31 March 2020, the income statement showed a draft profit for the year of $90000. What effect did these omissions have on the draft profit for the year?
- A$680 overstated
- B$680 understated
- C$1920 overstated
- D$1920 understated