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Question

Mr. Ram has a business of selling shoes. He bought goods worth Rs 50,000 on credit from Mr. Ajay. Also, he borrowed a sum of Rs 1,00,000 from his friend Mr.Shyam. What would be the amount of creditors which wil be recorded in his books?


A

Rs 1,00,000

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B

Rs 50,000

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C

Rs 1,50,000

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D

Rs 2,00,000

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Solution

The correct option is B

Rs 50,000


A lender lends money to a person or institution but he is not a creditor. A creditor is a person to whom money is owed by the person or institution for the goods acquired for resale. Hence only Rs 50,000 shall be recognised as creditors.


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