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Hello sir,
A credit sale of $3670 was incorrectly incorrectly entered in the sales day book as $3760
How can be this won’t effect suspense a/c??
The allowance for receivables which decreased by $420,had been entered in the allowance for receivables account as an increase.
Could you please show like should do,did do,to correct?
Many thanks ?
The suspense account is only affected when the debit doesn’t equal the credit.
The total of the sales day book is posted to receivables and sales accounts, so even if the total is wrong the debit and credit entries will both be wrong but will be of the same amount.
As far as the allowance for receivables is concerned, they should have debited with 420 but they have credited with 420. Therefore the balance will be 840 more than it should have been.
To correct it we need to debit the allowance with 840 and credit the suspense account.
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