Multiple choice

What will be the journal entry if credit sales of Rs. 15400 of X Ltd. have been entered in sales day book as Rs. 14500. Which of the following entries will correct this error?

  1. Debit X Ltd. account and credit sales account with Rs. 15400

  2. Debit X Ltd. account and credit sales account with Rs. 900

  3. Debit sales account and credit X Ltd. account with Rs. 900

  4. Debit cash account and credit sales account with Rs. 900

  5. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Both sales and X Ltd. accounts are understated by Rs. 900. Entries are required to increase the amount due from X Ltd. and increase sales by crediting the sales account.

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