Personal tax refund question

dreamkatcha

Hi,

I'm working through a practice FRA simulation question that's got me stumped. It's as follows:-

It has been noted that there was a refund for an overpayment of personal tax for Barry Curran in July 2004 for £5310. This had been debited to the bank but no other entry has been made (to be allocated to the partner's current account).

Taking account of Harry's comment regarding the personal tax payment for Barry Curran prepare a journal entry to adjust this and then post it to the adjustment column in the trial balance.

I'm leaning towards crediting drawings and crediting Barry's current account, but that doesn't look right to me. Any help would be much appreciated, thanks.

garry_coombs

If it has only been debited to the bank so far then the other side should be sitting in the suspense account, so I think you would have to debit suspense and credit partners current account.

Well thats what I would think

CathG

Yes - that's what I'd do as well - you'd be clearing the suspense and giving the chap his money (personal income tax refund) in his current account.

Not long now until results......!!

mark130273

i agree with the 2 above . clearing the suspence account and the chaps getting his wonga?lol

and tick tick .........its getting closer.........

everyone staying up then ?:tongue_smilie:

dreamkatcha

Sorry for taking so long to respond to this thread and saying thanks for your advice. I'd forgotten all about this post and didn't receive email notification of your replies.