Partner commission of Rs 7000 was wrongly debited though it should have been credited. What is the effect on closing balance?

Correct answer: Understated by Rs 14000

Direct answer: Option A, understated by Rs 14,000. Commission payable to a partner is normally credited because it increases the partner’s claim. Here it was wrongly debited by Rs 7,000 instead of being credited by Rs 7,000. Step by step: the correct effect should be +Rs 7,000; the recorded effect was -Rs 7,000; the difference is Rs 7,000 - (-Rs 7,000) = Rs 14,000. Therefore the closing balance is Rs 14,000 lower than the correct balance. Option A is correct. Option B, understated by Rs 7,000, counts only the wrong debit or only the missing credit, not both sides of the correction. Option C, overstated by Rs 7,000, reverses the direction. Option D, no effect, is wrong because the debit and credit treatments produce different balances. Memory cue: changing a wrong debit into the correct credit causes a two-times amount correction.