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Under fixed capital method opening credit balance in current account was wrongly treated as debit balance. Amount is six thousand rupees. What is total effect on closing balance?

Answer and explanation

Correct answer: It will be understated by twelve thousand rupees

It should have been credit but was treated as debit. Difference from correct position is double the amount which is twelve thousand rupees.

Related tags

Opening BalanceErrorCurrent AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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