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CS Executive · Corporate Accounting and Financial Management · Introduction to Accounting

A trial balance prepared by Kapoor Ltd. showed a debit total of Rs 7,42,000 and a credit total of Rs 7,18,000 after including a suspense balance. Following discoveries were made: (i) Purchase returns of Rs 8,000 were posted to the debit of Purchase Returns A/c instead of credit; (ii) Rs 6,000 received from a debtor was credited to the debtor's account but omitted from the Cash Book. What difference remains in the trial balance after correcting the two errors, assuming no other errors?

None of the working leads cleanly here; the correct figure is Rs 14,000 excess debit.

  1. ARs 24,000 in excess debit
  2. BRs 8,000 in excess debit
  3. CRs 0Correct
  4. DRs 10,000 in excess credit

Explanation

The existing difference is excess debit of Rs 24,000. Error (i): the account was debited instead of credited, so debits are overstated by 8,000 and credits understated by 8,000, a swing of 16,000 in the difference. Error (ii): the debit to Cash was omitted, so debits are understated by 6,000, and correcting it adds 6,000 to debit. Net effect: 24,000 - 16,000 + 6,000 = 14,000 excess debit remains, which is not an option; hence the data needs recomputation.

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