Question

In: Accounting

Kash Company is reviewing its December 31, 2020 unadjusted trial balance and determines that a sale...

Kash Company is reviewing its December 31, 2020 unadjusted trial balance and determines that a sale in the amount of $15,000 had been incorrectly recorded as a debit to sales and a credit to accounts receivables. The correcting journal entry at December 31, 2020 is:

Debit accounts receivables and credit sales $30,000

Debit accounts receivables and credit retained earnings $30,000

Debit retained earnings and credit sales $15,000

Debit accounts receivables and credit sales $15,000

Solutions

Expert Solution

The correct answer is A "Debit accounts receivables and credit sales $30,000"

Entry which should have been passed:

Accounts receivable Dr. 15,000

To sales 15,000

Entry which was passed:

Sales Dr. 15,000

To accounts receivables 15,000

Thus, to nullify the effect of wrong entry and then to pass the correct entry, the reversal entry will be by $30,000

ekkarill92 answered 2 years ago
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