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Hi Sir, there is quite a peculiar answer given in the the BPP exam kit (i’ll show the extract):
Eva Co. sales tax a/c showed opening Cr balance of 4540 and closing Dr balance of 2720.
in the answer it lists both the opening and closing balance in the credit side of the sales tax a/c. and i thought the closing debit balance would be on the debit side. Can you please explain why the answer is like this or is it a typo?
many thanks, Mij
Although the final balance is a debit, it was have been carried down from the credit side.
Suppose you have an account with a debit of a 1000 and a credit of 200. The balancing figure is 800 on the credit side, which is then carried forward to the debit side. There is a net debit on the account.
My free lectures on the double entry booking chapter of our free lecture notes explain how we balance off accounts.
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