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CMA Foundation · Fundamentals of Financial and Cost Accounting · Accounting Cycle

Which of the following accounts will appear on the credit side of a trial balance prepared from the ledger balances of a sole proprietor?

Sundry creditors appears on the credit side of the trial balance because it is a liability with a credit balance. Drawings, purchases and carriage inwards are debit balances, since drawings reduce capital and the other two are expenses of the business.

  1. ADrawings account
  2. BSundry creditors accountCorrect
  3. CPurchases account
  4. DCarriage inwards account

Explanation

Liabilities, capital and incomes carry credit balances, so Sundry creditors appears on the credit side. Drawings, purchases and carriage inwards are a reduction of capital or expenses and carry debit balances, so they appear on the debit side.

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