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A company made sales of $2,950 inclusive of sales tax at 18%.
The company debited the Receivables account $2,950, credited sales $2,950 and credited the
Sales Tax account $531.
What corrections are required?
A! Dr Sales! $450;! Dr Sales tax $81;! Cr Suspense account $531
B! Dr Sales! $531;! Cr Suspense account $53In this question the ans is given B, but i think the ans should have been A. since sales should be 2500 and sales tax 450 so we should reverse sales by Dr. 450 and Dr. sales Tax by 81. Please explain. Thank You.
The correct entry should have been DR Receivables 2,950; CR Sales 2,500; CR Sales tax 450
So to correct the entry that was actually made, we need the following:
DR Sales 450
DR Sales tax 81
CR Suspense 531This means that A is correct.
However, are you sure that you copied the question correctly? If you did, then it seems that the answer in your book is wrong.
thank you teacher, i lost much time on this question. yes, i am sure i copied correctly. Thank you.
Hello! Please, someone explain me what does exactly mean this: The purchase returns day book included a sales credit note for $230 which had been entered correctly in the account of the customer concerned, but included with purchase returns in the nominal ledger.
I also want to ask : Is that the correct entry: Dr Sales returns $230
Cr Receivables $230The entry that has been made: (is it that): Dr Purchase returns $230
Cr Receivables $230And it is shown that the correction in the journal is:
Dr Purchase returns $230
Dr Sales returns $230
Cr Suspense a/c $460I don’t understand why we debit again Purchase returns in the journal?
Or I completely don’t understand this question???
Please, help me 🙂 Thank you in advance 🙂can the tutor help darina pls because this question also confuses me
thank youThe correct entry would have been DR Sales returns CR Receivables
Because it has been included in purchase returns, the entry they must have made is CR Purchases returns CR Receivables.
So to correct it they need to DR Purchase returns (to remove the wrong entry) and DR Sales returns (which is what should have happened). The CR for both is to the suspense account.
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