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CMA Intermediate · Financial Accounting · Financial Statements from Incomplete Records

Anil's creditors were ₹70,000 at the start of the year and ₹90,000 at the end. Cash paid to creditors was ₹4,10,000 and discount received ₹10,000. There were no purchase returns. Credit purchases for the year were:

Credit purchases are ₹4,40,000. Build the creditors account: payments, discount received and closing balance total ₹5,10,000 on the debit side. Subtracting the opening balance of ₹70,000 leaves the purchases needed to balance the account.

  1. A₹4,40,000Correct
  2. B₹4,30,000
  3. C₹4,50,000
  4. D₹4,10,000

Explanation

Creditors account: debits are cash 4,10,000 + discount 10,000 + closing 90,000 = 5,10,000. Credits are opening 70,000 + purchases. Purchases = 5,10,000 - 70,000 = ₹4,40,000. Ignoring discount gives 4,30,000, which is wrong.

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