ICAEW AF · Chapter 7 · Question 9 of 12
A credit sales invoice for £1,240 was entered in the sales day book as £1,420 and posted from there. What is the effect of this error and how is it corrected?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Receivables and revenue are both overstated by £180; correct by Debit Revenue, Credit Receivables £180
Explanation
This is an error of original entry: the wrong amount was recorded in the book of prime entry, so both sides of the double entry used £1,420. The trial balance still agrees, but receivables and revenue are both £180 too high (£1,420 - £1,240). The correction is to debit revenue and credit receivables with £180.
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