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Help journals

TRIPTRIP Just JoinedRegistered Posts: 3
Hi

I am really struggling with Journals??

What would the journal enteries be for the following

salary payment of £1000 paid in cash book & correctly entered but no entry in the salaries made??

purchase invoice of 60 + vat ommitted?

Any help would be great x

I

Comments

  • sdvsdv Experienced Mentor Registered Posts: 585
    TRIP wrote: »
    Hi

    I am really struggling with Journals??

    What would the journal enteries be for the following

    salary payment of £1000 paid in cash book & correctly entered but no entry in the salaries made??

    purchase invoice of 60 + vat ommitted?

    Any help would be great x

    I

    Journals are written instructions to Junior on what account to debit and what account to credit.


    Of course you must be clear on your understanding of the double entry and that’s what the examiner is testing


    The above problem is all about ERRORS and how to correct them by use of Journals


    To solve the ERRORs there are 4 rules you need to follow

    1 Replicate the Error

    2 ask your self; will the trial balance BALANCE?

    3 If answer is NO – Open Suspense Account and put the balancing figure in it to balance the Trial Balance. You are now ready to correct the ERROR

    If the answer is YES you are ready to correct the ERROR

    4 Correct the ERROR





    Lets deal with the second problem first; purchase invoice of 60 + vat omitted

    Accounts required
    1 Purchases
    2 VAT
    3 PLCA


    Step 1 – Replicate Error – nothing to replicate – as the whole entry was OMMITED
    Step 2 – will the trial TB balance?
    Step 3 – YES there are no entries on any accounts therefore in all accounts the balance is nil
    Step 4 – Correct the ERROR

    DEBIT........... Purchases £60
    Debit ............VAT……………£9
    Credit............PLCA……………………………£69


    Now Deal with the difficult problem

    salary payment of £1000 paid in cash book & correctly entered but no entry in the salaries made


    Accounts required
    1 Salary
    2 Cash
    3 May be Suspense

    Step 1 – Replicate Error –


    ………………………CASH….........……………lllllllll……………SALARY………………
    ............................Salary £1000


    Step 2 – will the trial TB balance?

    Step 3 – NO – OPEN SUSUPENSE A/C and enter the balancing figure

    ……………CASH………..……………lllllllll……………SALARY………………llllllllll…………..…Suspence………..
    ………..………....Salary £1000……………………………………………………….Bal £1000


    Step 4 – Correct the ERROR


    The entry in the credit cash account is correct. No need to change
    The salary account should have a debit balance of £1000 and we need to clear the suspense a/c



    JOURNAL
    Debit ………..Salary a/c………. £1000
    Credit ……….Suspense a/c ……………………£1000
  • TRIPTRIP Just Joined Registered Posts: 3
    Thank you for your help! Think I will have to keep practising!!

    If cash received £150 was posted to SLCA as £100 would the journal be

    Credit SLCA £50
    Debit Bank £50 ???
  • sdvsdv Experienced Mentor Registered Posts: 585
    TRIP wrote: »
    Thank you for your help! Think I will have to keep practising!!

    If cash received £150 was posted to SLCA as £100 would the journal be

    Credit SLCA £50
    Debit Bank £50 ???

    NO!

    The bank has already been debited with £150. Why do you want debit the bank again?
    The bank has been debited with £150 and SLCA has been credited with £100.

    Therefore you now need to Credit an account with £50 to balance the accounts (Trial Balance)

    Guess which would you need? - SUSPENSE a/c

    Correction Journal

    Credit SLCA £50
    Debit Suspense £50
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