O Level Accounting (7707)•7707/11/M/J/20

Explanation
Correcting wrong-side posting in control accounts Steps:
- Note the reported debit balance of 2,000 entry.
- Identify the error: the $2,000 entry, meant for purchases ledger, was posted to sales ledger on the wrong side.
- Apply accounting rule: wrong-side posting misstates the balance by twice the entry amount ($4,000).
- Adjust the overstated debit balance: 4,000 = $6,000.
Why A is correct:
- Wrong-side errors in ledger accounts overstate/understate balances by 2x the amount, per standard error correction principles.
Why the others are wrong:
- B: Subtracts $2,000 once, failing to account for the doubling effect of wrong-side posting.
- C: Adds $2,000, incorrectly assuming the error understated the balance.
- D: Adds $4,000, wrongly treating the error as understating by twice the amount.
Final answer: A
Topic: Control accounts
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