dec 2004 exam

meibaker

the total value of a purchase invoice for electricity for 329 inclu vat was debited to selling expense, electricity should be charged to admins expense.
for the journal entry i had
Dr admins exp 280
Dr vat 49
Cr selling expense 329
but the answer to this is
Dr admins exp 280
Dr vat 49
Cr electricity 329
so, do you not need to correct the error for the selling exp?
decem 2004 exam

wolfe

im not a 100% sure but i think your entry is correct ie
DEBIT admin 280
DEBIT vat 49
CREDIT selling exp 329

i think theres no need to credit electicity coz it was already correctly credited.

meibaker

thanks for that.