Opening creditors are Rs. 18,000, cash paid to suppliers is Rs. 60,000, returns outward are Rs. 4,000, and closing creditors are Rs. 24,000. What are the credit purchases?
Correct answer: C. Rs. 70,000
- A. Rs. 62,000
- B. Rs. 66,000
- C. Rs. 70,000
- D. Rs. 76,000
Explanation
Credit purchases are calculated as closing creditors plus cash paid and returns outward, minus opening creditors. Therefore, Rs. 24,000 + Rs. 60,000 + Rs. 4,000 - Rs. 18,000 equals Rs. 70,000.
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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.
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