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Hi Sir,
Could you pls help me with the following question.
Sales( Including sales tax) 109250
Purchases ( net of sales tax) 64000Sales tax is charged at 15%.Sales tax account showed at opening credit balance of $4540 at the beginning of the month, and a closing debit balance of $2720 at the end of the month.
What was the total sales to authorities during the month of March 2003?My answer was $ 6470, but the given answer is $11910.
This was what I did.
Dr. Sales tax account Cr.
Purchases 9600 Opening balance 4540
Closing balance 2720 Sales 14250
balance 647018790 18790
If you wish me to answer, then in future you must ask in the F3 Ask the Tutor Forum.
This forum is for students to help each other.Although we need to end up with a debit balance, we get it by carrying it forward from the opposite side. So you should have put the 2720 on the credit side.
That would end up giving you 11910.
(By putting 2720 on the debit side, as you have, you would end up with a credit balance on the account)
I am really sorry. I posted the question by mistake over here instead of ACCA tutor Forum.
I didn’t get you, why should i post 2720 on the credit side if it says that it has a debit balance of 2720.
Could you pls explain in details, Sir.
Balances are always carried forward to the opposite side.
Suppose you have a debit of 1,000 and a credit of 200.
The missing figure to make it balance is 800 on the credit side.
The 800 is then carried down to the opposite side, so we end up with a debit balance (which is obviously correct – the net of 1,000 debit and 200 credit is 800 debit)I do suggest that you watch the lectures on double entry bookkeeping. Our lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
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