Marwan Limited made sales net of VAT of £90,000 in May. These net sales were posted in error to the credit side of the purchases account. What is the journal entry required to correct this error of principle?

Question

Quizplus · Accepted Answer

To correct the error, the purchases account (which was incorrectly credited) needs to be debited, and the sales account (which should have been credited in the first place) needs to be credited, both by the amount of £90,000. This reverses the incorrect entry and records the sales correctly.

Marwan Limited Made Sales Net of VAT of £90,000 in May