Question

Open 'T' shape account of our Creditor 'X' and write the following transactions on the proper side:

		(₹)
(i)	Purchased goods from X on Credit	40,000
(ii)	Paid to X	30,000
(iii)	Returned goods to X	6,000
(iv)	Purchased goods from X for Cash	20,000
(v)	Purchased goods from X on Credit	50,000
(vi)	Paid to X	45,000

Answer 1

Increase in Creditors (being a liability) will be shown on the credit side and decrease in the creditors will be recorded on the debit side of the Creditors Account.

X’s Account (Creditor)
Dr.					Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Record decrease in Creditors on this side-			Record increase in Creditors on this side-
2. Paid to X		30,000	1. Purchased goods from X on credit	40,000
3. Returned goods to X		6,000	5. Purchased goods from X on credit	50,000
6. Paid to X		45,000
Total		81,000	Total	90,000
Balance		9,000
		90,000		90,000

Note: Transaction Number (iv) will not be recorded in Creditors Account as goods are purchased for cash. Thus, there will be no impact on Creditors Account.