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Dear Sir,
I have not been able to solve the test question 7 in chapter 17 which is as followsThe bookkeeper of Barbara made the following mistakes:
Discounts allowed $3,840 was credited to the discounts received account
Discounts received $2,960 was debited to the discounts allowed account
Which journal entry will correct the errors?
DR CR
A Discounts allowed $7,680
Discounts received $5,920
Suspense account $1,760
B Discounts allowed $880
Discounts received $880
Suspense account $1,760
C Discounts allowed $6,800
Discounts received $6,800
D Discounts allowed $3,840
Discounts received $2,960
Suspense account $880i get the suspence account as 1760 debit, but the disc allowed and received are 3840 and 2960 respectively.
please reply with the solution as to how the amounts in the discounts received and discount allowed come up to 880 eachregards
tariqYou have posted exactly the same question twice – please do not do that.
Also, in future, if you want me to answer a question then you must ask in the Ask the Tutor Forum – this forum is for students to help each other.
The balance on the discounts allowed account should indeed be a debit balance of 3,840. At the moment there is a debit balance of 2,960 and so to correct it we need an extra debit of the difference of 880.
The balance on the discounts received account should be a credit of 2,960. At the moment there is a credit balance of 3,840, and so to correct it we need a debit of the difference of 880.
For both debits, the double entry is to the suspense account, so credit suspense with 1760 (880 + 880)
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