A debtor accepts a bill for Rs. 30,000 in settlement of his account. What is the immediate effect on the debtor’s account?
Correct answer: A. The debtor’s account is credited by Rs. 30,000
- A. The debtor’s account is credited by Rs. 30,000
- B. The debtor’s account is debited by Rs. 30,000
- C. Sales are credited by Rs. 30,000
- D. Drawings are debited by Rs. 30,000
Explanation
Acceptance of a bill replaces the debtor’s ordinary receivable with a bills receivable asset. The debtor’s account is therefore credited to remove the amount due. Sales are not recorded again because the original sale has already occurred.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Incomplete Records
Incomplete records require profit and financial position to be reconstructed when a complete double-entry system is unavailable. Methods include statements of affairs, capital comparisons, control accounts, cash summaries and margin calculations to find missing sales, purchases, expenses, assets, liabilities and drawings, while distinguishing business profit from changes in capital.
Practise Incomplete Records
34 free Incomplete Records MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Incomplete Records questions
Cash rent paid during the year is Rs. 72,000. Rent prepaid is Rs. 8,000 at the beginning and Rs. 11,000 at the end. What rent expense should be charged for the year?
The owner’s personal electricity bill of Rs. 9,000 is paid from business cash. How should this payment be treated?
A trader has cost of goods sold of Rs. 320,000 and applies a mark-up of 25% on cost. What are the sales?
In a statement of affairs, an omitted business liability will usually cause closing capital to be:
Which statement best distinguishes a statement of affairs from a balance sheet?
A business has sales of Rs. 500,000 and a gross profit equal to 25% of sales. What is the cost of goods sold?