Sep 122007
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.
