Fortuna Limited Received an Invoice for Purchases of Goods for Resale

question 37

Multiple Choice

Fortuna Limited received an invoice for purchases of goods for resale of £20,000. This invoice was debited to the salaries expense account and credited to trade payables. What is the journal entry required to correct this error of commission?

• A) Debit purchases £20,000, Credit salaries £20,000.
• B) Debit salaries £20,000, Credit purchases £20,000.
• C) Debit trade payables £20,000, Credit salaries £20,000.
• D) Debit purchases £20,000, Credit trade payables £20,000.

---

Definitions:

Hourly Wages

Hourly wages are the amount of money workers are paid for each hour of work, often used to compensate employees in various job types for their labor.

Comparable Work

Comparable work refers to jobs that are sufficiently similar in terms of skills, effort, responsibility, and working conditions, used often in discussions about fair wages and equal pay.

GDP

Gross Domestic Product (GDP) measures the total value of all final goods and services produced within a country's borders in a specific time period, representing the size of its economy.

Trade Deficit

A scenario in which a nation's expenditure on imported goods and services surpasses its revenue from exports, leading to a net export of the home currency to international markets.