Multiple Choice, Question 107 Topeka Bike Company received a $940 check from a c

Question

Multiple Choice, Question 107

Topeka Bike Company received a $940 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $490 and a credit to Service Revenue $490. The correcting entry is



A. debit Cash, $940; credit Accounts Receivable, $940.
B. debit Cash, $450 and Accounts Receivable, $490; credit Service Revenue, $940.
C. debit Cash, $450 and Service Revenue, $490; credit Accounts Receivable, $940.
D. debit Accounts Receivable, $940; credit Cash, $450 and Service Revenue, $490.


Multiple Choice, Question 72

Taylor Industries purchased supplies for $1,000. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $500. Which of the following would be the correct way to complete the recording of the transaction?



A. Credit another liability account for $500.
B. Credit an asset account for $500.
C. Credit the Taylor, Capital account for $500.
D. Debit the Taylor, Capital account for $500.

Explanation / Answer

1)

The correct journal entry for this transaction is:

Dr. Cash 940

Cr. Acounts receivable 940

But they incorrectly recorded the following journal entry:

Dr. Cash 490

Cr. Service revenue 490

So, to correct the mistake we need to record the following jouranl entry:

Dr. Cash 450

Service revenue 490

Cr. Accounts receivable 940

Thus, the answer is C.

2)

The correct journal entry for this transaction is:

Dr. Supplies 1,000

Cr. Cash 500

Accounts payable 500

So the answer shoud be B.

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.