CSEET · Fundamentals of Accounting · Accounting Process
Rao Enterprises' Debtors Account of Kiran shows: opening balance ₹10,000 (Dr), credit sales ₹25,000, cash received ₹20,000 and goods returned by Kiran ₹3,000. What is the closing balance of Kiran's account?
Kiran's closing balance is ₹12,000 debit. Debit side totals ₹35,000 (opening balance plus credit sales), credit side totals ₹23,000 (cash received plus goods returned). The excess of debits over credits gives a debit balance of ₹12,000, the amount Kiran still owes.
- A₹12,000 debitCorrect
- B₹18,000 debit
- C₹12,000 credit
- D₹58,000 debit
Explanation
Debits: 10,000 + 25,000 = 35,000. Credits: 20,000 + 3,000 = 23,000. Balance = 35,000 − 23,000 = ₹12,000 debit. Option B ignores the sales return of ₹3,000 and the cash... actually it ignores the return only after treating cash alone (35,000−20,000=15,000); the ₹18,000 figure results from treating the return as a debit-side reduction wrongly.
Did you get it right without looking?
One question tells you little. A timed set on Accounting Process shows your real accuracy, how long you take and where you lose marks.
More Accounting Process questions
- A cash book has columns for cash, bank and discount. Mehta Traders deposits cash of ₹20,000 into its bank account. How is this entry recorde…
- At the year-end, Kavita Stores has total assets of ₹9,50,000 and capital of ₹5,00,000 at the start of the year. During the year she drew ₹60…
- On 31 March, the books of Gupta Stores showed that a credit purchase of Rs 8,000 from Naveen was entered in the Purchases Book as Rs 6,800. …
- Rohan & Co. purchased office furniture for Rs 15,000 but debited the amount to the Purchases Account. Which statement correctly describes th…
- While preparing a trial balance, the accountant finds that the total of the debit side is Rs 7,25,000 and the credit side is Rs 7,40,000. A …
- The trial balance of Meera Traders did not agree, and the difference of Rs 4,000 was placed on the credit side as a Suspense Account. Later …