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+--- Thread: Journal Entry Question (/showthread.php?tid=8337)
Journal Entry Question - 4MySanity - 07-13-2010
Hey,
Im a student, having to take Financial Accounting as part of a Commerce progam. I had a question about Journal Entrys. My question is fairly simple I think...
I was given a scenario, where I own a company and I send an invoice to another company for $5,000 but the invoice nor question doesnt specify wheather the 5,000 is for work done, or equipment purchased, or for whatever...
Then the question asks, "Journalize this invoice"
Im at a loss to where I would even start...Usually I can do most journal entries, but this one I mean, where do you even begin, does anyone have any input, or advice?
- Dard - 07-15-2010
Incomplete information
- Fareed - 07-18-2010
Brother, I think its a type of trick question.
As we know that if we receive a check of say 5000 from Mr.Ahmed (Say), but in our records there is no one by the name of Ahmed (neither in Receivables nor in payables) what we will do is to Debit the Cash account and for the time being Credit SUSPENSE account.
I think the same would apply here, If the question does not tell, what the invoice is all about, what you have to do is to Debit the cash account and credit the suspense account. Make a note to the examiner at the end of the question as follows
NOTE Since the purpose of the invoice is unknown, a suspense account has been opened and a correcting entry shall be passed as soon as the purpose is known.