An inexperienced accountant for Huang Company made the following errors in recording merchandising transactions.
A $195 refund to a customer for faulty merchandise was debited to Sales Revenue $195 and credited to Cash $195.2.A $180 credit purchase of supplies was debited to Inventory $180 and credited to Cash $180.3.A $215 sales discount was debited to Sales Revenue.4.A cash payment of $20 for freight on merchandise purchases was debited to Freight-Out $200 and credited to Cash $200.
Answer | ||||||||
Entry Made in the books: | ||||||||
1)A $195 refund to a customer for faulty merchandise was debited to Sales Revenue $195 and credited to Cash $195. | ||||||||
Corrected Entry is done as below, | ||||||||
Answer = Debited to Sales return for $ 195 and credited to Cash for $ 195 | ||||||||
2.A $180 credit purchase of supplies was debited to Inventory $180 and credited to Cash $180. | ||||||||
Corrected Entry, | ||||||||
Answer = $180 credit purchase of supplies was debited to Inventory $180 and credited to Supplier(Account payable). | ||||||||
3.A $215 sales discount was debited to Sales Revenue. | ||||||||
Answer = Sales Discount of $ 215 will be debited to Sales Discount account | ||||||||
4) A cash payment of $20 for freight on merchandise purchases was debited to Freight-Out $200 and credited to Cash $200. | ||||||||
Answer = Freight payment against merchandise purhcase was debited to Freight - In with $ 200 and credited to Cash $ 200 | ||||||||
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