CMA Foundation · Fundamentals of Financial and Cost Accounting · Journal and Ledger
Mehta Stores' Sharma Ac shows: opening balance Rs 12,000 (Dr); goods sold on credit Rs 30,000; cash received Rs 25,000; goods returned by Sharma Rs 2,000; discount allowed Rs 500. What is the closing balance in Sharma's account?
The closing balance is Rs 14,500 debit. Debits total Rs 42,000 (opening plus credit sales) and credits total Rs 27,500 (cash, sales return and discount allowed). The difference, Rs 14,500, is the amount Sharma still owes the firm.
- ARs 14,500 debitCorrect
- BRs 15,500 debit
- CRs 14,500 credit
- DRs 13,500 debit
Explanation
Debits: 12,000 + 30,000 = 42,000. Credits: 25,000 + 2,000 + 500 = 27,500. Balance = 42,000 - 27,500 = 14,500 debit. Ignoring the discount gives 15,000 and ignoring both return and discount gives 17,000, so the other figures are wrong.
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