Errors Limited Made Credit Sales of £12,000 Inclusive of VAT

question 6

Multiple Choice

Errors Limited made credit sales of £12,000 inclusive of VAT. The double entry to records these sales was Debit sales £10,000, Debit VAT £2,000, Credit trade receivables £12,000. What is the journal entry required to correct this error?

• A) Debit trade receivables £12,000, Credit sales £10,000, Credit VAT £2,000.
• B) Debit cash £12,000, Credit sales £10,000, Credit VAT £2,000.
• C) Debit trade receivables £24,000, Credit sales £20,000, Credit VAT £4,000.
• D) Debit cash £24,000, Credit sales £20,000, Credit VAT £4,000.

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Definitions:

Approach-Approach

A conflict arising from having to choose between two attractive alternatives.

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