A company checks written for $600 for rent expense cleared the bank correctly but the company accountant incorrectly recorded the check for $60.

The journal entry to correct this error would be:

a. debit cash, $540; credit rent expense, $540

b. debit rent expense, $600; credit cash, $600

c. no journal entry required

d. debit rent expense, $540; credit cash $540

Question

Business

Deangelo Rangel

11 August, 23:03

A company checks written for $600 for rent expense cleared the bank correctly but the company accountant incorrectly recorded the check for $60.

The journal entry to correct this error would be:

a. debit cash, $540; credit rent expense, $540

b. debit rent expense, $600; credit cash, $600

c. no journal entry required

d. debit rent expense, $540; credit cash $540

+4

Answers (1)

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Alexis Butler · Answer 1

Option D, debit rent expense, $540; credit cash $540

Explanation:

To start with, it is important to note that the check of $600 has correct posting in the bank account, hence that requires no adjustment.

However, on the cash book side, a lesser amount has been credited as outflow of cash to the tune of $540 ($600-$60), hence the correct entry would be record the balancing cash flow by crediting cash book and debiting the rent expense account, hence option D appropriately captured that correct entry.