Question

19. Furniture Purchased for 20,000 from Mohan is recorded in the Purchases Book. Due to above
error:
(a) Trial Balance will agree
(b) Trial Balance will not agree
(c) Trial Balance will show difference of 20,000
(d) Trial Balance will show difference of 10,000​

Answer 1

Answer:

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Answer 2

Answer:

Trial Balance will agree (option A) will be the correct answer for  Furniture Purchased for 20,000 from Mohan is recorded in the Purchases Book.

Explanation:

Furniture Purchased for 20,000 from Mohan is recorded in the Purchases Book in this Trial Balance will agree because:

• we have done a wrong entry in the journal i.e.

Purchases a/c        Dr. 20,000

To Mohan                                 20,000

(being furniture)

This is a wrong entry

The correct entry is as follows:

Furniture a/c       Dr. 20,000

To Mohan                              20,000

(being furniture purchased from Mohan)

This is the correct entry for furniture purchased.

This is the error of compensation because both purchases and furniture a/c is having a debit balance which means two entries are compensating each other and in this way, no error will be disclosed by the trial balance.

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