Question

Exercise 5-11

An inexperienced accountant for Larkspur, Inc. made the following errors in recording merchandising transactions.

1.		A $310 refund to a customer for faulty merchandise was debited to Sales Revenue $310 and credited to Cash $310.
2.		A $281 credit purchase of supplies was debited to Inventory $281 and credited to Cash $281.
3.		A $150 sales discount was debited to Sales Revenue.
4.		A cash payment of $41 for freight on merchandise purchases was debited to Freight-Out $410 and credited to Cash $410.

Prepare separate correcting entries for each error, assuming that the incorrect entry is not reversed. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
3.
4.

Answer 1

No	Account title	Debit	Credit
1	Sales returns and allowances	$    310
	Sales Revenue		$     310
2	Cash	$    281
	Supplies	$    281
	Inventory		$     281
	Accounts payable		$     281
3	Sales discounts	$    150
	Sales revenues		$     150
4	Cash ($410-41)	$    369
	Inventory	$      41
	Freight - Out		$     410