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accounts-doubt

Sumana Siddaiah (B.Com, CS inter*) (261 Points)

22 September 2010

could anyone resolve my doubts? ALONG WITH REASONS

1. a trial balance will not balance if-

a. correct journal entry is posted twice.

b. the purchase on credit basis is debited to purchases and credited to cash.

c. Rs.500 cash payment to creditors is debited to creditors for Rs.50 and credited to cash as Rs.500.

d. none of the above

2. Rs.1500 received from sub-tenant for rent and entered correctly in the cash book is posted to the debit of the rent account. in the trial balance-

a.the debit will be greater by Rs.3000 than the credit total.

b. the debit total will be greater by Rs.1500 than the credit total. (i thought it was 'b', but its wrong)

c. subject to other entries being correct the total will agree

d. none of the above

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8 Replies

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 22 September 2010

for ist one answer is c and second answer is d

for the first tb will not tally and for the second answer the given question seems that TB will tally

Saurabh Toshniwal (ca final) (2358 Points)
Replied 22 September 2010

agree with sivaram

Faiz Ahmed ( Article Trainee) (1731 Points)
Replied 22 September 2010

Answer to Q.2

Assuming there are no other transaction, Cash A/c will have a Debit balance of Rs1500 and Rent A/c will have a Debit balance of Rs1500(according to question). But on Credit side there is NIL balance, So TB will show excess debit of Rs3000 in comparison to Credit side.

Hence answer will be (A)

Faiz Ahmed ( Article Trainee) (1731 Points)
Replied 22 September 2010

Answer to Q.1

Answer is (C).

Reasons as given below:-

Test of option (A)-- When journal entry which is correct and is posted twice will result in showing excess balance to the tune of amount shown in extra entry. Since, the entry is correct in all respect both debit and credit side will tally.

Test of option (B) --- Correct entry for credit purchases is Purchases A/c Dr

To Party A/c

In the question, Purchases aspect is correctly posted. Only credit aspect is wrongly posted to credit side of cash A/c. Since the entry satisfies the double entry aspect, it will tally TB.

Test of option (C) ---- Correct entry required Creditors A/c Dr. 500

To cash A/c 500

In the question, entry passed is Creditors A/c Dr. 50

To Cash A/c 500

So debit side will fall short of Rs450. Hence, this will lead to non tallying of TB.

Hence option (C) is correct.

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