An inexperienced accountant for Leyland Company made the following errors in recording merchandising transactions.
1. A ₤225 refund to a customer for faulty merchandise was debited to Sales Revenue ₤225 and credited to Cash $225.
2. A ₤480 credit purchase of supplies was debited to Inventory ₤480 and credited to Cash ₤480.
3. A ₤160 sales return was debited to Sales Revenue and credited to Accounts Receivable.
4. A cash payment of ₤50 for freight on merchandise purchases was debited to Freight-Out ₤500 and credited to Cash ₤500.
Instructions
Prepare separate correcting entries for each error, assuming that the incorrect entry is not reversed. (Omit explanations.)

Question

Quizplus · Accepted Answer

The Answer of An inexperienced accountant for Leyland Company made the following errors in recording merchandising transactions.
1. A ₤225 refund to a customer for faulty merchandise was debited to Sales Revenue ₤225 and credited to Cash $225.
2. A ₤480 credit purchase of supplies was debited to Inventory ₤480 and credited to Cash ₤480.
3. A ₤160 sales return was debited to Sales Revenue and credited to Accounts Receivable.
4. A cash payment of ₤50 for freight on merchandise purchases was debited to Freight-Out ₤500 and credited to Cash ₤500.
Instructions
Prepare separate correcting entries for each error, assuming that the incorrect entry is not reversed. (Omit explanations.)

An Inexperienced Accountant for Leyland Company Made the Following Errors