A lady buys goods worth 200 rupees from the shopkeeper. The goods were reasonable quality merchandise sold for what the market would bear.

The lady gives the shopkeeper a 1000-rupee note. The shopkeeper runs out of change, and gets change from the next shop. He keeps the 200 rupees (for selling the goods) and returns 800 to the lady. Later the neighbour comes back with the 1000-rupee note, proving it's a fake, tearing it up and demanding his money back.

How much did the shopkeeper lose?

A) Rs. 200
B) Rs. 800
C) Rs. 1200
D) Rs. 1800
E) Rs. 1600
F) Rs. 2000
G) Other

  • $\begingroup$ The question is not solvable without stating if the shopkeeper is responsible for the fake note gven to the neighbor or not. The debate is who is responsible for the fake 1000, but it is not a puzzle $\endgroup$
    – dataguy
    Commented Dec 21, 2015 at 16:46
  • 1
    $\begingroup$ If he does not repay the neighbor, he lost nothing. If he repays the neighbor, he lost 1000. $\endgroup$
    – dataguy
    Commented Dec 21, 2015 at 17:04

11 Answers 11

  1. Shopkeeper starts with 200rs (in the form of goods)
  2. After transacting with the lady, he has 200rs in cash.
  3. After the moneychanger shows the banknote is counterfeit, he owes the moneychanger 1000rs.

- Current Balance = 200rs (cash) - 1000rs (debt) = -800rs
- Initial Balance = 200rs (goods)
- Profit/Loss = Current Balance - Initial Balance = -1000rs

The lady started with nothing of value and gets 200rs in goods and 800rs in cash. The moneychanger does not gain or lose money. The 1000rs loss is borne by the shopkeeper.

  • $\begingroup$ Didn't want to write an answer, so here's a comment. Pretend that the shopkeeper DID have change. He takes the 1000, gives the lady the item worth 200 plus 800 cash. Right now he's even, if the 1000 bill is good. Then later he needs change, so he goes to the moneychanger to trade in the 1000. The moneychanger notices right away that the bill is fake and tells the shopkeeper. The shopkeeper has lost 1000. I think these two scenarios are equivalent, so I'm upvoting the 1000 answer. $\endgroup$ Commented Jun 10, 2015 at 18:00
  • 2
    $\begingroup$ @VictorHenry An easier way to think about it is to just assume the 1000 is worth 0. So, the shopkeeper gets 0, gives 800 back in change, and gives 200 in goods. 200 + 800 = 1000 lost. $\endgroup$
    – Aggie Kidd
    Commented Jun 10, 2015 at 19:35
  • $\begingroup$ It took me a bit to figure it out, but I believe this is the correct answer. I was originally thinking 1200rs, but the lady only netted 1000rs (800 in cash and 200 in goods). If it was 1200, then where did the extra 200rs go? $\endgroup$ Commented Jun 10, 2015 at 19:56

In short the shop keeper lost Nothing!

Actually it's pretty simple... At the time the customer teared up the 1000 rs note it was the neighbor's property at that point. He may demand his money back equally the shopkeeper could refuse. You do not explicitly state that the shop keeper must refund the note to the neighbor and rightly so because...

1) The neighbor may be corrupt and could have switched the note with a fake in the time since the shop keeper handed the note to the neighbor.

2) Equally the shop keeper could deny that he had given the neighbor that exact note.

The shop keeper hasn't lost anything until he refunds neighbor and he may have no intention of doing that.

0 rs loss!


A slightly simpler explanation:

He lost 1000. The lady started with 0rs worth of stuff and ended with 1000rs worth of stuff. No money / value was created or destroyed in this scenario, so that 1000rs had to come from either B or the money lender. It didn't come from the money lender, so it had to come from shop keeper B.


The shop keeper lost:

G) Other (1000rs)
The lady pays with 1000 rs, the shopkeeper then excanges the note for a 800 and 200 note, he keeps the 200 note and gives the 800 + the product to the lady.
At this point the shop keeper made no loss. Then the shop owner of shop b comes and tells him the 1000 note was fake, he takes his 1000rs back. The shop keeper now has -800rs left. The diffrence between -800rs and 200rs is 1000rs.

poor guy


G. Other
He didn't lose anything.

The riddle never specifies that he refunded shop A his 1000rs, and given the situation there is no reason for him to have done so. Given the lack of supervision by shopkeeper B on the 1000rs bill while in the possession of shopkeeper A, there is nothing that would suggest the bill is the same one the lady bought goods with.

As the goods sold were at no profit, the total change in revenue is 0.


The shop Keeper lost:

800rs worth of cash + 200rs worth of good

Here's the details:

Shopkeeper B's initial balance:
0rs + 200rs worth of good
After trade balance:
200rs worth of cash and -200rs worth of good
After neighbor return with fake balance:
200rs - (200rs + 800rs) worth of cash and -200rs worth of good


Double-entry accounting FTW.

enter image description here I've shown the balance sheets of each party at the start and after each event. The fake 1000R bill is in red. After the Neighbor discovers the fake (assuming it's the same 1000R bill, @DiscOH), the shopkeeper's accounts payable jumps from zero to 1000. This is the answer, he owes 1000.

  • 1
    $\begingroup$ It goes beyond assuming that it is the same bill... You would also have to assume that the shopkeeper is required to and/or will refund the money for the counterfeit note. $\endgroup$ Commented Jun 11, 2015 at 15:48

The answer is G but the actual loss amount is difficult to conceive

The first obvious guess would be Rs. 1,000 assuming shopkeeper bears the cost for the fake note. Alternatively, if the neighbour bears it, shopkeeper might not have to absolve the loss, so Nil could also be a possible answer, but then my guess is the figure might be anywhere between Rs. 8,00 to Rs. 1,000 both exclusive.

Shopkeeper buys a good to sell it at a premium which is called Selling Price. The price at which the shopkeeper buys is called cost price.

So S.P = C.P + Profit

If we exclude the neighbour from the transaction then we can equate the transaction between the lady and the shopkeeper as

$\text{Rs }1000 = C.P + Profit + \text{Rs }800$

$\Rightarrow C.P + \text{Rs }800 = \text{Rs }1000 - Profit = Loss$

Assuming Profit can be anywhere between 50 paisa (minimum legal tenderable amount in India) to Rs. 199.50, so the Loss could be anywhere between

$\text{Rs }999.50 \le Loss \le \text{Rs }800.50$


The shopkeeper lost

G) Rs 1000

Eliminate all the irrelevant part to get what is important.

Simple and direct explanation

He got a fake Rs 1000 note. He has to bear it. Everything else is settled perfectly without any problem so this is what remains.

Long Explanation

He keeps Rs 200 and gives the goods. Zero loss. He then has to pay the neighbour Rs 1000 for the fake note. Rs 1000 loss.

  • $\begingroup$ necro much? :) that answer was already given any number of times. $\endgroup$
    – Rubio
    Commented Oct 25, 2016 at 20:57
  • $\begingroup$ Yes the answer has been given by many people. But I didn't find the direct approach taken by anyone else i.e just considering the fake note. :) $\endgroup$ Commented Oct 26, 2016 at 1:10

He lost

C : 1200

Explanation :

1000 for the money he gave back and 200 worth of goods

  • 5
    $\begingroup$ But he still has the $200 cash that he didn't give the lady when he gave her the $800 (because he gave her the $200 in groceries instead). $\endgroup$
    – corsiKa
    Commented Jun 10, 2015 at 16:01
  • 4
    $\begingroup$ He got 1000 from the moneylender and gave it all back, so there is no net cashflow there. He gave the lady 200 of goods and 800 cash. That's a net cashflow outwards of 1000 with the lady. Where did the other 200 flow to? $\endgroup$
    – Dancrumb
    Commented Jun 10, 2015 at 17:53
  • 1
    $\begingroup$ @corsiKa: FYI, since we got MathJax, \$ signs need to be escaped with a backslash. This is what you're comment looks like: i.imgur.com/uKizxnU.png (no real problem, just thought you might want to know). $\endgroup$
    – Robin
    Commented Jun 10, 2015 at 20:08
  • $\begingroup$ Hahaha I just realized that. That's... that's kind of funny. Especially since I had two of them in there to complete my very awkwardly named variable. #awkward (can I do hashtags or does MathJax eat those too...) $\endgroup$
    – corsiKa
    Commented Jun 10, 2015 at 20:11
  • $\begingroup$ Damn... you're right... Next time I won't try to think while being tired $\endgroup$
    – Elried
    Commented Jun 11, 2015 at 7:52

He lost

A. 200. Which is the worth of the goods. I assume here that he has no money to begin with. Which could be a reason he had to change with the next shop. He begins and he ends with no money so he only lost the goods. The next shop's shopkeeper has lost 800 because he only could get 200 back from the first shopkeeper from his 1000. The first shopkeeper is actually still 800 in debt with the second shopkeeper but he hasn't lost it yet

  • 2
    $\begingroup$ I think it's wrong to assume he has no money, he just couldn't make the change for the 1000rs note, doesn't mean he has no other 1000rs note in his cash register $\endgroup$
    – skamlet
    Commented Jun 10, 2015 at 15:29
  • $\begingroup$ I would have originally upvoted this answer, however the question has been edited and is now clearer about the amount of money that the 2nd shop keeper wants back $\endgroup$ Commented Jun 10, 2015 at 16:19

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