A payment of cash of ₦20 to John was entered on the receipt side of the cash book in error and credited to John's account. Which of the following journal en...

Assessment: JAMB UTME - Principles of Accounts - 1995 Subject: Financial Accounting

Question 1 Report

A payment of cash of ₦20 to John was entered on the receipt side of the cash book in error and credited to John's account. Which of the following journal entry can be used to correct the error?
Answer Details
To correct the error, we need to reverse the incorrect entry by debiting John's account and crediting the cash account with the same amount of the incorrect entry. Therefore, the correct journal entry to rectify the error is: John: ₦20 Dr, Cash: ₦20 Cr This will reduce the amount credited to John's account by ₦20 and increase the cash balance by ₦20, which will cancel out the initial error in the cash book.
Read lesson note on Cashbook (JAMB)
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