Question

. Explain the key functions required when amending an account that is ready to be brought back into order. Discuss in 50–80 words.

Answer 1

Required functions are as below:

#) a reverse journal has to be made for establishing the accounting head: suppose a check is received from a customer for full-and-final settlement; the entry was “cash A/C debit and Accounts Receivable (customer) A/C credit”; now, the check is dishonoured in bank; that customer A/C must be brought back; in order to establish the account, a reverse journal has to be made, “Accounts Receivable (customer) A/C debit and cash A/C credit”.

#) ledger posting: in the accounts receivable A/C, the amount should debit, and in cash A/C, the amount should credit. This function is required for reflecting the figure in the balance sheet.