CMA Foundation · Fundamentals of Financial and Cost Accounting · Trial Balance
A trial balance prepared by the balances method for Sharma & Co. shows these debit balances: Purchases ₹1,20,000, Furniture ₹40,000, Debtors ₹30,000, Cash ₹10,000. Credit balances: Capital ₹1,00,000, Sales ₹90,000, Creditors ₹? The trial balance agrees. What is the creditors balance?
Creditors are ₹10,000. Debit balances total ₹2,00,000 (purchases, furniture, debtors and cash). Capital and sales credits total ₹1,90,000, so the balancing credit figure for creditors is the difference of ₹10,000, which makes both columns agree.
- A₹1,00,000Correct
- B₹10,000
- C₹30,000
- D₹1,10,000
Explanation
Debit total = 1,20,000 + 40,000 + 30,000 + 10,000 = ₹2,00,000. Known credits = 1,00,000 + 90,000 = ₹1,90,000. Creditors = 2,00,000 - 1,90,000 = ₹10,000. Check: 1,90,000 + 10,000 = 2,00,000.
Did you get it right without looking?
One question tells you little. A timed set on Trial Balance shows your real accuracy, how long you take and where you lose marks.
More Trial Balance questions
- The trial balance of Gupta & Co. shows total debits of Rs 4,86,200 and total credits of Rs 4,82,700, and the difference was placed in the Su…
- A Trial Balance did not agree and the difference was transferred to a Suspense Account. Which of the following is the correct statement abou…
- Using the balance method, a trader's ledger shows: Capital Rs 2,00,000; Purchases Rs 1,50,000; Sales Rs 2,40,000; Furniture Rs 60,000; Credi…
- Which statement best describes why an agreed trial balance is not conclusive proof of accuracy of the books?
- Which of the following best describes the primary purpose of preparing a trial balance at the end of an accounting period?
- Which one of the following is an objective of preparing a trial balance?