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please help me guys with following exercise, I have no idea from where is amount 16970, thanks in advance for explenation
link to exercise https://i989.photobucket.com/albums/af12/maciek_grzeszczu/balanbce.jpgok I already understood it, but I only don’t know whyy amount 4000(contra) is on debit side….
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@bik123 said:
ok I already understood it, but I only don’t know whyy amount 4000(contra) is on debit side….The answer to the 4000. This is because the payables figure should decrease as it is set off with a receivable. The reason why is it set off is because, the business is buying goods from customer XYZ(given for explanation) and also selling goods to business XYZ. So instead of paying him the 4000 it is jst compensating within themselves. I hope you understood. Thanks
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