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On 5 May, Gupta & Sons' Cash Book (with cash and bank columns) showed an opening cash balance of Rs 8,000. Transactions: cash sales Rs 12,000; cash deposited into bank Rs 10,000 (contra); cash paid to a creditor Rs 3,000 with discount received Rs 150; cash withdrawn from bank for office use Rs 4,000. What is the closing cash balance?
Closing cash balance is Rs 11,000. Cash receipts are 8,000 opening, 12,000 sales and 4,000 withdrawn from bank, totalling 24,000. Payments are 10,000 deposited and 3,000 to the creditor, totalling 13,000. Discount received is not a cash item.
- ARs 11,000Correct
- BRs 7,000
- CRs 7,150
- DRs 15,000
Explanation
Cash: opening 8,000 + sales 12,000 + withdrawal from bank 4,000 = 24,000 receipts. Payments: deposited 10,000 + creditor 3,000 = 13,000. Closing = 24,000 - 13,000 = 11,000. Discount is only a memorandum column and does not affect cash; adding it gives Rs 7,150 type errors.
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