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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 following: goods returned by a customer, Rs 9,000, were posted to the debit side of the Sales Returns Account correctly but the customer's account was also debited by Rs 9,000 instead of being credited. What is the effect of this error on the difference in the trial balance, and what is the difference after correcting it?

The difference becomes nil after correction. The wrong debit instead of a credit of Rs 9,000 creates a Rs 18,000 excess of debits, which equals the trial balance difference, so rectifying the posting fully removes it.

  1. ADifference becomes Rs 9,000 after correction
  2. BDifference becomes nil after correctionCorrect
  3. CDifference becomes Rs 18,000 after correction
  4. DDifference remains Rs 18,000 after correction because the error is one of principle

Explanation

The customer's account should have been credited by Rs 9,000 but was debited, so debits are overstated by 9,000 and credits understated by 9,000, a net debit excess of Rs 18,000. The observed difference is 5,48,000 - 5,30,000 = Rs 18,000. Correcting the posting removes the whole difference, leaving nil.

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