AP2 Chap 10

aclark

Hi, not quite sure if I am just having a stupid moment here, but in the question at the end of the chapter it asks...

The total column of sales returns day book has been overcast (overadded) by £200

I have to say how this will be added into the sales ledger control account.

Now if this £200 was added into the sales return book, it would of been on the Dr side, since it has been over added in the sales return book, I would then post £200 on the Cr side.

Wouldn't this mean that I would post the £200 on the Dr side of the Sales Ledger?

The answer says it is posted on the Cr side, is this just a printing error?

Yazi

Sales Returns Day Book has been overcast by £200. (This Day book is just a list of Sales returns to enter into the Sales Ledger)

Therefore your Sales have been reduced in error by £200.
This will be on the Debit side of the Sales Ledger Control Account.

You will need to Credit the Sales Ledger Control Account by £200 to put this value back into Sales.

(Remember the Day books are not part of the double entry system so you cannot credit the Day book.)

coojee

The original incorrect entry would have been DR Sales Returns and CR SLCA with the overcast amount so to reverse it you need to DR SLCA and CR Sales Returns. Initially the asset of debtors was reduced by £200 too much so we need to increase the asset again, to increase an asset account we DR it so in the absence of any further information I would say that the answer should be to DR the SLCA. Which book is this taken from? It's quite strange wording "how this will be added into the sales ledger control account" is that the direct wording from the question? Normally it would ask something like "how would this be corrected in the sales ledger control account" Maybe it's something to do with that, maybe they're not asking for the correction, maybe they're asking for the incorrect entry.

aclark

coojee wrote: »

maybe they're not asking for the correction, maybe they're asking for the incorrect entry.

I think this is where I went wrong, and yes they were asking how this would be corrected in the SLCA.

Thanks for the replies.