On its bank reconciliation for the month of December, Pack Corp, noted that it h

Question

On its bank reconciliation for the month of December, Pack Corp, noted that it had made an accounting eror It recorded the cash receipt from a sale to a customer as $48 instead of the actual amount of $84 Question: In Pack Corp 's month-end journal entry to record this reconciling item, which of the following is true? Select one O a The Sales Revenue account should be debited for $18 O b The Saes Revenue" account shouid be credited for $18 O c. The Accounts Receivable account should be debited for $18 O d. The Accounts Receivable' account should be credited for $18. O e. The Accounts Payable account should be credited for $18 O f. The Accounts Payable" account should be debited for $18

Explanation / Answer

Correct Answer---(b) The ‘Sales Revenue’ account should be credited for $18.

Explanation

Sales revenue is recorded as $46 instead of $64 which means sales is under-recorded by (64-46) $18.

Alternative

If assuming cash receipts is for an earlier sales, then accounts receivable will be credited with $18.

Note

Make sure to use option (d) if (b) is not accepted.

Please leave a comment in case of any further explanation required.

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