LESSON 11 5 Correcting Errors in Subsidiary Ledger

LESSON 11 -5 Correcting Errors in Subsidiary Ledger Accounts Original created by M. C. Mc. Laughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School CENTURY 21 ACCOUNTING © Thomson/South-Western

2 n Errors may be made in recording amounts to subsidiary ledgers that do not affect the general ledger controlling account n Example: a sale on account may be recorded to the wrong customer in the sales journal n The column total posted from the sales journal to the general ledger is correct n The accounts receivable account shows the correct balance n Two customer accounts in the accounts receivable ledger show incorrect balances n The correcting entry recorded in the general journal involves only subsidiary ledger accounts CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 11 -5

3 JOURNALIZING CORRECTING ENTRIES AFFECTING CUSTOMER ACCOUNTS page 327 December 10. Discovered that a sale on account to Cumberland Center on December 3 was incorrectly charged to the account of Country Crafters, $412. 00. Memorandum No. 56. 2 4 1 5 1. 2. 3. 4. Write the date. Write the name of correct customer. Write the memorandum number. Write the amount. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 6 5. Write the name of incorrectly charged customer. 6. Write the amount. LESSON 11 -5

4 POSTING CORRECTING ENTRIES AFFECTING CUSTOMER ACCOUNTS üA diagonal line is not needed in the Post. Ref. column to separate the references to the general ledger & subsidiary ledger account 1 5 2 3 4 1 2 3 CENTURY 21 ACCOUNTING © Thomson/South-Western page 328 5 4 1. Write the date. 2. Write the general journal page number. 3. Write the amount. 4. Calculate and write the new account balances. 5. Write the appropriate vendor number in the Post. Ref. columns. LESSON 11 -5