View Full Version : Journal Help PLEASE !!!!!
<BR>I'm just about to take my exam (Foundation Level) in June, and i'm terrified!!There is so many areas i'm still not 100% on, but my worst of all area is Journals. <BR>If anyone has any great tips for me to use, then they would be grately received.<BR><BR>Thankyou!! ;-)<BR><BR>Gem x
Hi Gem,<BR><BR>What problems are you actually having?
<BR>Every Question i keep getting on journals in the practise exams i am doing i just freeze and dont have a clue.<BR><BR>Eg:<BR><BR>The following errors have been made in the general ledger of Micro Goods<BR><BR>1) £85 has been debited to the insurance account instead of the motor tax account.<BR><BR>2) Purchases valaued at £7000 have been credited to the purchases account and debited to the creditors control account (ignore VAT).<BR><BR>3) A credit customer, TG Boon Limited, has ceased trading. The amount outstanding on its account of £250 plus VAT has been written off in the subsidery (sales) ledger only, but the net amount and VAT should also have been written off as a bed debt.<BR><BR>Record the journal entries necessary in the main (general) ledger to correct the above in the table provided below?????????????????????????????<BR><BR>Then i loose it!!!!!!<BR><BR><BR>Date Details Debit £ Credit£<BR><BR><BR><BR><BR><BR><BR>
I'm currently studying AAT Intermediate level and done foundation last year. Journals are fine once you get the hang of them, it's just a case of knowing your double entry very well<BR><BR>1) DR Motor tax account £85 & CR Insurance account £85 <BR><BR>What you have done there is to correct the original posting. So the cost of £85 was incorrectly posted to the Insurance account so you need to credit and debit the correct account Motor tax. <BR><BR>2) DR Purchase £14,000 & CR Creditors Control account £14,000<BR><BR>A purchase is always a debit so to correct this you will need to debit purchase twice, once to correct the error posting and then again to account for the purchase. So you will need to do the same for creditors control account, once to correct the error and then again to account for the credit purchase. <BR><BR>3) DR Bad Debt £250.00<BR> CR VAT £43.75<BR> CR Debtors Control £293.75<BR><BR>You will need to debit the bad debt expenses account. A credit is needed in the VAT account as the original entry would have been a debit and then you will need to take the total charge out of the debtors control account to reduce your debtors as you won't be owed this any more.<BR><BR>I hope this helps. Please let me know.<BR><BR>Good Luck for June.
<BR>Thankyou that's really kind, i'll go over that tonight when i get home (i'm at work right now) i think if i've got a set of correct answers in front of me it's almost like a safety net for me to work from, where as if i know nothing i get easily stressed and give up (this is a problem i must overcome)!!!<BR><BR>Thankyou once again Lisa ;-)<BR><BR>Gem x
I know the feeling I get very annoyed if I can't figure out what's going on.<BR><BR>Cheers<BR><BR>Lisa ;)
Hi Gem,<BR><BR>The main thing is not to panic. Easy said, not so easy to put into practice. Looking at the examples you've given they fall into three categories.<BR><BR>No.1 The amount has been posted into the wrong debit account. Correction - Credit account that has been incorrectly debited and debit account that should have been debited in the first place. Easiest of the three.<BR>No.2 The accounts debited and credited are correct but the entries have been reversed - Correction - As Lisa stated - To reverse and correct you must double the amount and post correctly (This corrects original error and leaves the accounts with the correct balances). Second hardest of the three.<BR>No.3 The most difficult of the three. It requires the completion of the correct treatment. It's as if the accountant started to account for the bad debt but was called away by his manager before finishing. Only one side of the transaction needs to be completed. Lisa has detailed the correct treatment (except the £43.75 VAT should be Debited, Typo I imagine).<BR><BR>So, we've seen three examples of what the examiner can throw at you. I'm only guessing, but there is perhaps 5 to 6 other scenarios that can come up. The trick is to look at past papers and become familiar with the scenarios (We've covered three!) and be able to spot them when you open your exam paper. Look back at the past papers and see if you can spot the most common.<BR><BR>Being able to spot a recurrence of the tests should give you the confidence to avoid that panic attack that has afflicted everyone that has ever picked up an exam paper.<BR><BR>Best of luck with the intermediate stage next summer (unless you want to take it in December. lol)<BR><BR>Regards<BR>Seamus<BR>
Not sure if you are still struggling or not, but when I was at foundation stage I really struggled with remembering which entries were debits and credits, once I had mastered this, journals were far far easier. Basically, if you remember PEARLS (Purchases, Expenses, Assets, Revenue, Liabilities, Sales), PEARLS is split down the middle, PEA are debits and RLS are credits. I am now at Technician stage, and still use PEARLS to remember some of the less obvious entries! Hope this helps!
Paddywack51
26-05-03, 00:00
Journals cover any capital expense eg the cost of a new delivery van and the correction of errors.<BR><BR>Entries in the wrong account eg motor expenses being entered in admin expenses require a simple correction - Dr Admin expenses Cr Motor expenses. <BR><BR>Errors caused by entries in the correct account but on the wrong side need correcting twice, once to return the account to what it was and once more to complete the transaction. I was always told to use this method to also correct errors made by the wrong amount being entered. By doing the entey twice the paper trail is easier to follow than just posting the difference. Hope this helps.
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