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CA Foundation · Accounting · Accounts from Incomplete Records

Sunil, a trader, has these figures for the year: opening bank balance Rs 20,000 (debit), cheques received from debtors Rs 3,00,000, cheques issued to creditors Rs 1,80,000, rent paid by cheque Rs 24,000, cash deposited into bank Rs 50,000, and cheques received from debtors dishonoured Rs 10,000. What is the closing bank balance?

The closing bank balance is Rs 1,56,000. Receipts of Rs 3,70,000 (opening, cheques, deposit) less payments of Rs 2,14,000 (creditors, rent, dishonoured cheque) give this figure. Ignoring the dishonoured cheque would wrongly give Rs 1,66,000.

  1. ARs 1,56,000Correct
  2. BRs 1,66,000
  3. CRs 1,46,000
  4. DRs 1,76,000

Explanation

Receipts = 20,000 + 3,00,000 + 50,000 = 3,70,000. Payments = 1,80,000 + 24,000 + 10,000 (dishonoured cheques reduce the bank) = 2,14,000. Closing = 3,70,000 - 2,14,000 = 1,56,000. Rs 1,66,000 results from ignoring the dishonour.

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