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Today, 11:34

Adams Company has employed a bookkeeper who is inexperienced. On December 28, after reviewing the records for the year, you discover the following error.

On June 1, Adams Company paid a supplier $300 on account. The bookkeeper recorded this by debiting Cash for $300 and crediting Accounts Payable for $300.

Required: Prepare a correcting entry on December 28. Make sure to enter the day for each separate transaction.

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Answers (2)
  1. Today, 13:04
    0
    Debit Credit

    Trade payable $300

    Cash $300

    Explanation:

    First we have to reverse the wrong journal entry which has been made by the inexperienced bookkeeper in the Adams Company accounts:

    Debit Credit

    Trade payable $300

    Cash $300

    Now we have to record the correct journal entry in the accounts of Adam Company in respect of account settlement with supplier which is given as follow:

    Debit Credit

    Trade payable $300

    Cash $300
  2. Today, 13:16
    0
    Answer: Dr: Account payable $300, Cr: cash $300

    Explanation:

    General journal

    Date. Description of entry. Dr. Cr

    $ $

    June 1 Account payable. 300

    Cash. 300

    Being correction of

    entry for December 28

    The error made by the inexperienced bookkeeper can be corrected by simply reversing the entry to record the entry correctly.
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