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CA Foundation · Accounting · Accounts from Incomplete Records

Meera Textiles, Jaipur, does not maintain a sales ledger. Opening debtors were Rs 60,000 and closing debtors Rs 80,000. During the year it received Rs 4,20,000 in cash from debtors, allowed discount of Rs 8,000, wrote off bad debts of Rs 5,000, received sales returns of Rs 12,000, and received acceptances of Rs 30,000 in bills receivable from debtors. What were the credit sales for the year?

Credit sales are found by preparing a total debtors account. Closing debtors, cash received, discount allowed, bad debts, sales returns and bills receivable are added, and opening debtors is deducted. This gives credit sales of Rs 4,95,000, since all these items reduce debtors apart from sales.

  1. ARs 4,95,000Correct
  2. BRs 4,65,000
  3. CRs 5,55,000
  4. DRs 4,83,000

Explanation

In the total debtors account, debit side has opening debtors plus credit sales. Credit side has cash 4,20,000, discount 8,000, bad debts 5,000, returns 12,000, bills receivable 30,000 and closing debtors 80,000, a total of 5,55,000. Credit sales = 5,55,000 - 60,000 = 4,95,000. Rs 5,55,000 results from forgetting to deduct opening debtors.

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