During the month the following journal entries were recorded in the cash book:

1. Debit Cash $\pounds12{,}000$; Credit Sales Revenue $\pounds12{,}000$.
2. Debit Rent Expense $\pounds2{,}500$; Credit Cash $\pounds2{,}500$.
3. Debit Inventory $\pounds5{,}000$; Credit Accounts Payable $\pounds5{,}000$.
4. Debit Cash $\pounds3{,}000$; (the credit side was omitted by mistake).

After posting, the trial balance shows total debits $\pounds22{,}500$ and total credits $\pounds19{,}500$.

(a) Determine the amount that should have been recorded on the missing credit side.
(b) Suggest the most appropriate account for that credit entry.

Question

During the month the following journal entries were recorded in the cash book:

1. Debit Cash $\pounds12{,}000$; Credit Sales Revenue $\pounds12{,}000$.
2. Debit Rent Expense $\pounds2{,}500$; Credit Cash $\pounds2{,}500$.
3. Debit Inventory $\pounds5{,}000$; Credit Accounts Payable $\pounds5{,}000$.
4. Debit Cash $\pounds3{,}000$; (the credit side was omitted by mistake).

After posting, the trial balance shows total debits $\pounds22{,}500$ and total credits $\pounds19{,}500$.

(a) Determine the amount that should have been recorded on the missing credit side.
(b) Suggest the most appropriate account for that credit entry.

Accepted Answer

£3,000 credit to Sales Revenue

Gce Model Questions Vol1 2020 Financial Accounting Question 16

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