ReconciledrillDeposit recorded for the wrong amount
Compare the deposit slip with the ledger entry and the statement. If the bank credited the slip amount and the ledger shows something else, it is a book error: adjust the book side by the difference and post a correcting entry to Cash and the account originally credited, usually Accounts Receivable or Sales.
Syntax
Book side: add (ledger too low) or subtract (ledger too high) the difference. Entry: Dr/Cr Cash and the opposite to A/R or Sales| Part | What it is |
|---|---|
Deposit slip | The source document; the bank should match it |
Recorded short | Ledger too low; add the difference and Dr Cash |
Recorded long | Ledger too high; subtract the difference and Cr Cash |
Examples
Deposit slip 2,750; bank credited 2,750; books show 2,570Result: Book error, recorded short by 180. Add 180 on the book side. Entry: Dr Cash 180 / Cr Accounts Receivable 180.
Deposit slip 980; bank credited 980; books show 1,080Result: Book error, recorded long by 100. Subtract 100 on the book side. Entry: Dr Sales (or A/R) 100 / Cr Cash 100.
Deposit slip 2,750; books show 2,750; bank credited 2,570Result: Bank error of 180. Add 180 on the bank side, no entry, ask the bank to correct.
Common mistakes
- Correcting Cash without correcting the receivable or sales account: both sides of the original entry carried the error.
- Treating it as a deposit in transit: the deposit did clear, just for a different figure.
- Guessing the side: always go back to the deposit slip to decide who made the mistake.
Practice Deposit recorded for the wrong amount
These drills check your answer on live data, free, no account needed.
- A deposit recorded shortClassify every line, enter the correction for any error, then the adjusted bank and book balances.
- Errors on both sidesClassify every line, enter the correction for any error, then the adjusted bank and book balances.
- Correcting a book errorClassify every line, enter both adjusted balances, then choose the journal entry the company must record for each item that affects its books.
Questions
What if the deposit slip itself was wrong?
Then the bank credited what was actually deposited and the books should be corrected to the real cash received; any shortfall versus the invoice stays in receivables.
Does a deposit error affect revenue?
Only if the original entry credited Sales. If it credited Accounts Receivable, the correction adjusts the receivable, not revenue.
Related
- Book errorsA book error is a company mistake in recording cash: a check entered for the wrong amount or a deposit recorded twice. Adjust the book side and correct it.
- Bank errorsA bank error is a mistake on the statement, such as another company's check charged to your account. Correct it on the bank side, no entry, and tell the bank.
- Deposits in transitA deposit in transit is cash recorded in the books that the bank has not yet credited. Add it to the bank statement balance and make no journal entry.
- Correcting entryA correcting entry fixes a mistake in a posted transaction: reverse the wrong part and record the right one, or post the net difference. Examples by error.