Adams Company has employed a bookkeeper who is inexperienced. On December 28, af

Question

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 Date Debit Credit Dec. 28 Accounts Payable 300 300x Cash June Cash 300 Accounts Payable 300 Clear Undo Help

Explanation / Answer

the book keeper record the transaction as

CASH 300

ACCOUNTS PAYABLE 300

which is wrong

the correct entry is:

Accounts payable 300

cash 300

answer for this is

1)first we have to cancle the wrong entry by reversing the entry which is

accounts payable 300

cash 300

2)Record the correct Entry

accounts payable 300

cash 300

The final entry is

Accounts payable 600

cash    600

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