Correction of Errors using a Journal.

A journal is usually used to correct errors that have been made.  The errors must be able to be corrected by means of a double entry, to be able to put it right by journalling.

So, if £500 of sales of square widgets had been incorrectly posted to sales of round widgets, the correcting journal would be as follows:

DEBIT     Sales of Round Widgets    £500
CREDIT  Sales of Square Widgets                   £500

Thus, the overall effect would be that the sales of square widgets ledger account would have a correct credit of £500 and sales of round widgets ledger account would have both a credit entry of £500 and a debit entry of £500 which would cancel eachother out.


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