Question

Correcting the Trial Balance: Alpha’s customer returned merchandise two days after a cash sale of $900 was made. Alpha’s bookkeeper incorrectly recorded the journal entry

for the return twice.  Alpha uses the periodic inventory system. What corrections, if any,

should be made to the trial balance?

Debit Column                            [ Select ]                       ["No correction is required.", "-900 +900", "The correct answer is not listed.", "-900", "+900 +900"]      

Credit Column                            [ Select ]                       ["+900 +900", "The correct answer is not listed.", "No correction is required.", "+900", "-900"]      

Answer 1

we have recorded sales return entry twice, so we have to reverse the same.

Sales Return Entry under periodic system =

Debit Column = Sales Return & Allowances $900

Credit Column = Cash $900

as we have recorded the same entry twice we have to reverse one entry to nullify the error

Reversal entry =

Debit column = Cash +$900

Credit Column = Sales Return & Allowances -$900

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