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Sir it is clearly said that net purchases is transferred to trading account Why do we again show in trading account As to purchases less returns
Answers (9)
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Thread Starter
Prasanth KumarSee this one. Why don't we directly write 250 in outer column saying To purchases 250
Yes you are correct u can do that way too ...just for explaining ICAI has shown like that.
Deepak Raja
Send the question please.
See this one. Why don't we directly write 250 in outer column saying To purchases 250
Thread Starter
Prasanth KumarIf in trial balance purchases given 500 And purchase returns 250. As per above logic said by icai why can't we assume that The 500 is amt obtained after deducting 250
If both purchases and purchase returns are given is the trail balance it means that you need to adjust that. In the following circumstances you can you can assume that the purchase balance given is after net-off 1. If only purchases are given and purchase returns are not given 2. If question specifically tells that the purchases amount given is after deducting the purchase returns.
Madhuri Veluri
If both purchases and purchase returns are given is the trail balance it means that you need to adjust that. In the following circumstances you can you can assume that the purchase balance given is after net-off 1. If only purchases are given and purchase returns are not given 2. If question specifically tells that the purchases amount given is after deducting the purchase returns.
Mam but in case of bad debts and debtors given in trial balance we initially assume that debtors amount is amount obtained after deducting bad debts. Explain it mam
Thread Starter
Prasanth KumarMam but in case of bad debts and debtors given in trial balance we initially assume that debtors amount is amount obtained after deducting bad debts. Explain it mam
As and when bad debts occur, the same should be adjusted by debiting bad debts account and crediting sundry debtors account. Since bad debts are written off at the time of occurrence during the accounting period, bad debts account appears inside the trial balance. In such case, all that is to be done is to transfer bad debts account to the debit side of Profit and Loss Account.