Leslie Ltd Has Found an Error in Its Revenue Account

Multiple Choice

Leslie Ltd has found an error in its revenue account: an invoice for $3000 was recorded as revenue in 2015 when it should have been recorded in 2016.The company's income tax rate is 40 per cent and there was no corresponding error in cost of goods sold.
-Assuming that the dividend is unchanged,what is the effect of the error on retained profits at end of 2015?

A) It is $1200 too high.
B) It is $1800 too high.
C) It is $3000 too high.
D) There is no effect.