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The receivables column in debit side of a cash book has been added up by $100 too much.
When the list of receivables balances is being reconciled with the receivables ledger control account, what correction(s) will be needed?
A No correction is needed
B The receivables control account balance needs to be increased by $100
C The receivables control account balance needs to be decreased by $100
D The sum of the list of balances needs to be increased by $100This was the explanation given: $100 too much will have been credited to the
receivables control account from the cash book column total.Why is the answer B? I am confused.
Appreciate if anyone can help (:
The answer is B.
So, you add up the Dr side of the CB by $100 too much. This total is used to credit the receivables control account – so it is credited $100 too much. The adjustment needed is therefore to reduce it by $100.
B is the correct answer because the receivables have paid what they owe to the business with cash but it seemed like the account had overstate the amount in the cash a/c.which is wrong,so that overstated amount should be returned to the receivable by debit DAT amount in his/her a/c
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