Error adjustments

janakG
janakG Registered Posts: 9
the question is what adjustment do you need to make to the SLCA?

the sales ledger column in the cash book - debit side was undercast by 100

why is the adjustment CREDITING 100?

Comments

  • thelowendtheory18
    thelowendtheory18 Registered Posts: 298 Dedicated contributor 🦉
    It's understated payments received by customers ..therefore the amount that the customers OWES the business has been OVERSTATED

    To correct the error a credit entry is needed to REDUCE the debt that its customers owes
    AAT

    Level 2 Foundation Certificate in Accounting - 30 Nov 18
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  • Bender
    Bender Registered Posts: 3 New contributor 🐸
    It is a very murky explanation and not for everyone to understand. The debit side in Cash Book shows amounts received by the business from customers - in our case the money have been paid by Debtors for the goods sold to them on credit. In the sales ledger control account the amounts due to the business by its customers (Debtors) are shown on the Debit side - but the amounts already paid by customers are on its Credit side. If it was undercast by 100 in Cash Book that means the Credit side in SLCA needs to be increased by 100 in order to reduce the debit amount balance for the amount paid but not recorded yet.
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