Journal Entry

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:32AM in AAT student discussion
!Can someone help please!
A cheque for £450 recieved from Tina BA and Co had been posted to the account of Tina AB and co in error
what is the journal entry?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Journal Entry

    Are those two companies creditors?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Journal Entry
    A cheque for £450 recieved from Tina BA and Co had been posted to the account of Tina AB and co in error
    what is the journal entry?
    The error was to credit Tina AB and not to credit Tina BA.
    The correction is:-
    debit Tina AB (this nets to 0)
    and
    credit Tina BA
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Journal Entry

    So, what you did was presumably:

    Dr Bank £450
    Cr Tina AB & Co £450

    I prefer to reverse the error completely, then put the correction in from scratch:

    Dr Tina AB & Co ..£450
    Cr Bank ..............................£450
    Dr Bank ............. £450
    Cr Tina BA & Co ...........£450

    As Sandy says, you could do the correction directly, by Debiting Tina AB and Crediting Tina BA. This is less work, but may make it harder to see what exactly you did.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Journal Entry

    Quick reply please

    what action do you take when this is to be transfer to suspense account? do you Debit bank 450 and credit suspence account?

    a little bit confuse here :x

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Journal Entry

    This wouldn't use the suspense account at all as the trial balance would still balance, it has just been entered in the wrong subsidiary account.

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