Consider this scenario, A debtor pays the entire amount owing on their account.
ID: 2331844 • Letter: C
Question
Consider this scenario, A debtor pays the entire amount owing on their account. Complete the debtor ledger and general journals for a payment of $929.40 on the 3rd March.
The Debtor's ledger is as follows:-
G.Tomlinson
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Date:- 1/3 Docket:- N/A Details:- Opening Balance Debit:- N/A Credit:- N/A Balance:- $929.40
Date:- 3/3 Docket:- 453729 Details:- Payment received-G.Tomlinson Debit:-$929.40 Credit:-N/A Balance:- N/A
General journal
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Debtors
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Date:- 1/3 Docket:- N/A Details:- Opening Balance Debit:- N/A Credit:- N/A Balance:- $17,569.42
Date:- 3/3 Docket:- N?A Details:- Payment received-G.Tomlinson-G.Tomlinson Debit:-N/A Credit:-$929.4 Balance:- $18498.82
Cash at bank
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Date:- 1/3 Docket:- N/A Details:- Opening Balance Debit:-N/A Credit:-N/A Balance:- $128,851.65
Date:- 3/3 Docket:-N/A Details:- Payment received-G.Tomlinson Debit:-$929.4 Credit:-N/A Balance:-$126781.05
Please check the above the amount/number are being inserted in the right debit and credit column, and check the Balance amount is the being calculated right, if they are not, please correct them and explain why you give this correction! (Please type up your answer)
Explanation / Answer
Debtor's ledger = Drs balance in ledger should be shown as debit balance and after getting payment it should be credited with that amount to close the account. Hence 929.4$ should be credited and then balance will be nil.
General Journal
Debtors = Here entries are made correct.
Cash at bank = When we recieve payment from Debtors , it will be debited in cash at bank because it will increase the bank amount. Thus the closing balance should be (128851.65 + 929.4) 129781.05.
hence here the balance shown is wrong.