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Dear John,
A receivables ledger control account had a closing balance of $8,500. It contained a contra to the payables ledger of $400, but this had been entered on the wrong side of the control account.
What should be the correct balance on the control account?
A $7,700 debit
B $8,100 debit
C $8,400 debit
D $8,900 debitAns : 8500-(2*400)= 7700
My question is that why we multiply 400 by 2?Kind regards,
IrumIf has been entered on the wrong side (i.e. here on the debit side), then you need to credit 400 to cancel the wrong entry, and then credit 400 to put in the correct entry. So a total credit of 800.
Dear John,
What if the situation is opposite i .e if wrong entry has been entered on credit side. Then what would be the steps.Kind regard
If you mean that an amount had been credited when it should have been debited, then it would be exactly the reverse – to correct it you would debit with two times the amount.
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