CA Foundation · Accounting · Accounting Process
A compound journal entry records the following: Cash A/c Dr. 40,000; Bank A/c Dr. 60,000; Discount Allowed A/c Dr. 2,000; to Sundry Debtor Mr. Das A/c X. Which statement about this entry is correct?
X equals Rs 1,02,000. Every journal entry must have equal debits and credits, and the debits are Cash 40,000, Bank 60,000 and Discount Allowed 2,000. So Mr. Das's account is credited with the full Rs 1,02,000.
- AX is Rs 98,000, because discount is deducted from the total
- BX is Rs 1,02,000, because total debits must equal total creditsCorrect
- CX is Rs 1,00,000, because discount allowed is ignored
- DX is Rs 58,000, because cash and discount are netted off
Explanation
In double entry, total debits equal total credits. Debits are 40,000 + 60,000 + 2,000 = 1,02,000, so Mr. Das is credited with 1,02,000. Option 98,000 wrongly subtracts the discount, which is itself a debit.
Did you get it right without looking?
One question tells you little. A timed set on Accounting Process shows your real accuracy, how long you take and where you lose marks.
More Accounting Process questions
- Which of the following accounts normally shows a credit balance when balanced in the ledger?
- In the books of Kiran Stores, the Purchases Account shows a debit total of Rs 3,80,000 and the Purchases Returns are Rs 24,000, which are re…
- Gupta Traders' Purchases Book total for the month is Rs 1,20,000 but, while posting, the accountant debited Purchases Account with Rs 1,02,0…
- A trial balance of Mehta & Co. shows total debits of Rs 5,48,000 and total credits of Rs 5,30,000. The difference was traced to the followin…
- Goods costing Rs 18,000 were sold on credit to Anil for Rs 25,000. Which entry correctly reflects the rules of debit and credit?
- At the start of the year, a firm's assets were Rs 6,00,000 and liabilities Rs 2,40,000. During the year, the owner introduced additional cap…