Question

Decisions, Decisions As the full charge bookkeeper, your job is to make any corrections to the general ledger accounts. Each correction needs the reason for the change and the effect on each account, whether it is an increase or decrease. Louisa has come to you for help. For the third time this month, she has recorded a cash receipt twice. She wants you to record a correcting entry that will reverse her mistakes. The correcting entry she wants you to make will record a credit to the Cash account and a debit to the Sales. What should you investigate before making a decision about the correcting entry? What is happening to the cash account? From an ethical standpoint, what could be transpiring? Based on the results of your investigation, what are your options for addressing this issue? Remember - citing assigned course materials is encouraged to demonstrate tie- o - 9 e ©

Answer 1

from the above case we can find that a cash sale entry is wrongly entered.as we know that entry for cash sale will be debit the cash a/c and credit the sale a/c,instead here it is wrongly done credit to cash and debit to sale.so due to wrong entry here cash balance reduced by the respective amount and the sales also.when an entry is passed wrongly,to rectify the effect of the wrong entry first have to identify which are the accounts involved in the entry and then pass the reverse entry with corresponding amount.