ACCA Applied Knowledge · Financial Accounting · Correction of errors
A credit sale of $2,300 to customer Hale was correctly entered in the sales account but was posted to the receivables ledger account of customer Hall. Which correcting journal is needed?
Debit Hale's receivable account and credit Hall's account by $2,300. The sale was posted to the wrong customer's ledger account, so the balance is moved between the two accounts. Sales and the receivables control account are unaffected, as the totals were correct.
- ADebit Hale receivable $2,300; credit Hall receivable $2,300Correct
- BDebit Hall receivable $2,300; credit Hale receivable $2,300
- CDebit Receivables control $2,300; credit Sales $2,300
- DDebit Sales $2,300; credit Hale receivable $2,300
Explanation
Hall was wrongly debited and Hale was not debited. The correction debits Hale $2,300 and credits Hall $2,300. Option B would make the error worse. The control account and sales are already correct, so no entry is needed there.
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