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After a while the later shop -keeper arrives and says the1000$ currency is a fake one and takes back his money and goes. Please estimate the loss incurred by the shop keeper.
If the shopkeeper did not earn any profit on the goods sold to that lady, then, the loss incurred is $1000 ($700 goods + $300 cash).
However, in reality, business entities exist for the purpose of making profits. Therefore, original loss to shopkeeper is cost of goods sold to that lady + $300. The profit element is not a loss.
1300 and what entry could be passed on
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