Discount allowed to Ram of ₹150 was credited to Discount Received Account. What is the amount of difference created in the Trial Balance?
Answer and explanation
Correct answer: A. ₹300 on credit side
- Step 1: Discount allowed is an expense and should be debited by ₹150.
- Step 2: Instead, it was credited to Discount Received Account by ₹150.
- Step 3: The debit side was short by ₹150 and the credit side was increased by ₹150, creating a net discrepancy of on the credit side.
Answer
₹300 on credit side.
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