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If purchase of goods amounting Rs. 500 has been wrongly posted to credit side of purchase account. The difference in the Trial Balance would be:
- a)Rs. 500
- b)Rs. 250
- c)Rs. 1,000
- d)Rs. 1,500
Correct answer is option 'C'. Can you explain this answer?
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If purchase of goods amounting Rs. 500 has been wrongly posted to cred...
Incorrect Posting of Purchase Amount
When a purchase of goods worth Rs. 500 is wrongly posted to the credit side of the purchase account, it results in an error in the Trial Balance.
Impact on Trial Balance
The Trial Balance is a statement that lists all debit and credit balances of ledger accounts to ensure their equality. When the purchase of goods amounting Rs. 500 is posted to the credit side of the purchase account, it results in the following:
- The purchase account would have a credit balance of Rs. 500.
- The credit side of the purchase account would be overstated by Rs. 500.
- The debit side of the purchase account would be understated by Rs. 500.
- The Trial Balance would not tally as the total of debit and credit balances would not be equal.
Difference in Trial Balance
The difference in the Trial Balance would be the amount by which the credit side of the purchase account is overstated, i.e., Rs. 500.
Therefore, the correct answer is option 'C', which states that the difference in the Trial Balance would be Rs. 1,000.
When a purchase of goods worth Rs. 500 is wrongly posted to the credit side of the purchase account, it results in an error in the Trial Balance.
Impact on Trial Balance
The Trial Balance is a statement that lists all debit and credit balances of ledger accounts to ensure their equality. When the purchase of goods amounting Rs. 500 is posted to the credit side of the purchase account, it results in the following:
- The purchase account would have a credit balance of Rs. 500.
- The credit side of the purchase account would be overstated by Rs. 500.
- The debit side of the purchase account would be understated by Rs. 500.
- The Trial Balance would not tally as the total of debit and credit balances would not be equal.
Difference in Trial Balance
The difference in the Trial Balance would be the amount by which the credit side of the purchase account is overstated, i.e., Rs. 500.
Therefore, the correct answer is option 'C', which states that the difference in the Trial Balance would be Rs. 1,000.
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If purchase of goods amounting Rs. 500 has been wrongly posted to cred...
Purchase account should be debited by 500 but due to wrong entry, it is credited by 500.it affects purchase account by1000 because that amount should be debited has been credited. So to rectify purchase account we have to debit purchase account by 1000rupees
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If purchase of goods amounting Rs. 500 has been wrongly posted to credit side of purchase account. The difference in the Trial Balance would be:a)Rs. 500b)Rs. 250c)Rs. 1,000d)Rs. 1,500Correct answer is option 'C'. Can you explain this answer?
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