A business has opening trade receivables of Rs. 80,000, credit sales of Rs. 300,000, receipts from customers of Rs. 250,000, sales returns of Rs. 10,000, discounts allowed of Rs. 5,000, and bad debts of Rs. 8,000. What is the closing trade receivables balance?
Correct answer: B. Rs. 107,000
- A. Rs. 97,000
- B. Rs. 107,000
- C. Rs. 117,000
- D. Rs. 127,000
Explanation
Closing receivables equal opening receivables plus credit sales less receipts, returns, discounts, and bad debts. The calculation is Rs. 80,000 + Rs. 300,000 - Rs. 250,000 - Rs. 10,000 - Rs. 5,000 - Rs. 8,000, giving Rs. 107,000.
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About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
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