CA Foundation · Accounting · Accounting Process
The Purchases Book of Nair Traders for a month shows total credit purchases of Rs 1,20,000, which includes Rs 15,000 of goods bought from a supplier that were wrongly entered twice. Separately, a credit purchase of office stationery of Rs 4,000 was entered in the Purchases Book. What is the correct amount of credit purchases of goods for the month?
Correct credit purchases of goods are Rs 1,01,000. The duplicated Rs 15,000 entry must be removed, and Rs 4,000 of stationery must also be removed because only goods for resale belong in the Purchases Book; stationery goes through the Journal Proper.
- ARs 1,01,000Correct
- BRs 1,05,000
- CRs 1,16,000
- DRs 1,20,000
Explanation
Remove the duplicate entry of Rs 15,000: 1,20,000 - 15,000 = 1,05,000. Stationery is not goods meant for resale, so it does not belong in the Purchases Book; deduct Rs 4,000 to get 1,01,000. Rs 1,05,000 ignores the stationery error.
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