The following journal entries were posted during a month:

1. Purchase of goods on credit $\pounds15{,}000$. (Debit Purchases $\pounds15{,}000$; Credit Accounts Payable $\pounds15{,}000$)
2. Credit sales $\pounds20{,}000$. (Debit Accounts Receivable $\pounds20{,}000$; Credit Sales $\pounds20{,}000$)
3. Cash received from customers $\pounds12{,}000$. (Debit Cash $\pounds12{,}000$; Credit Accounts Receivable $\pounds12{,}000$)
4. Cash paid to suppliers $\pounds8{,}000$. (Debit Accounts Payable $\pounds8{,}000$; Credit Cash $\pounds8{,}000$)

After posting these entries the trial balance prepared by a student shows total debits $\pounds27{,}000$ and total credits $\pounds25{,}000$. Assuming the above four entries are correct, determine the amount and the likely accounts of the entry that was omitted, which would bring the trial balance into balance.

Question

The following journal entries were posted during a month:

1. Purchase of goods on credit $\pounds15{,}000$. (Debit Purchases $\pounds15{,}000$; Credit Accounts Payable $\pounds15{,}000$)
2. Credit sales $\pounds20{,}000$. (Debit Accounts Receivable $\pounds20{,}000$; Credit Sales $\pounds20{,}000$)
3. Cash received from customers $\pounds12{,}000$. (Debit Cash $\pounds12{,}000$; Credit Accounts Receivable $\pounds12{,}000$)
4. Cash paid to suppliers $\pounds8{,}000$. (Debit Accounts Payable $\pounds8{,}000$; Credit Cash $\pounds8{,}000$)

After posting these entries the trial balance prepared by a student shows total debits $\pounds27{,}000$ and total credits $\pounds25{,}000$. Assuming the above four entries are correct, determine the amount and the likely accounts of the entry that was omitted, which would bring the trial balance into balance.

Accepted Answer

£2,000 credit to Sales Revenue (debit Accounts Receivable £2,000)

Gce Model Questions Vol1 2020 Financial Accounting Question 17

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