Reference no: EM132535188

Question - Foresight Computer Services is showing a large amount in the Undeposited Funds account. Their income seems very high compared to previous periods. After investigating, you can see that they have been receiving payments from customers and recording deposits using Bank Feeds, posting directly to an income account. They need to produce monthly financial statements for their bank. They have hundreds of payments in the Undeposited Funds account for a six month period.

What is considered the best practice method for fixing this type of error?

1. Make a journal entry to credit sales and debit Undeposited Funds for each month

2. Make a journal entry to debit sales and credit Undeposited Funds for each month

3. Edit each deposit and check the appropriate payment(s), then delete the sales entry. Make sure the total deposit amount does not change. Repeat until all payments have been assigned to the appropriate deposit

4. Create one deposit, select all the outstanding payments, add a new deposit line, select the appropriate income accounts, and enter the total amount of the selected payments as a negative so that the deposit total is zero

5. Create monthly deposit, selecting all the payments for that month on the deposit screen. Add new deposit lines, selecting the appropriate income accounts, and enter a negative amount so that the deposit total is zero. Repeat for all six months.