Question

Goods purchased for Rs. 10,000 returned by Y are recorded in the purchase return book as Rs. 1000. This ______.

• A. will affect the agreement of trial balance
• B. not affect the agreement of trial balance
• C. may or may not affect the agreement of trial balance
• D. none of these

Answer 1

Answer: (A)

will affect the agreement of trial balance

When purchased goods are returned, the purchase return account is credited. If the amount recorded in the purchase return account is incorrect and correctly posted in the corresponding account, the purchase return account ledger will show incorrect balance. Ledger account balances are transferred to the trial balance, if the balance of an account is incorrect the trial balance will not tally.