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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

A $250 payment for salaries expense was incorrectly journalized and posted as a debit to Salaries Expense for $2,500 and a credit to Cash for $2,500. Using the one-step method, how would the entry be corrected?

  1. a. Cash    2,500

    Salaries Expense    2,500

  2. b. Salaries Expense    250

    Cash    250

  3. c. Cash    2,250

    Salaries Expense    2,250

  4. d. Salaries Expense    2,250

    Cash    2,250

To determine

Find the correct option, the option that indicates the corrected entry.

Explanation

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Justification for correct answer: A debit of $2,500 to Salaries Expense account has increased the expense account by $2,500. A credit of $2,500 to Cash account decreased the cash account by $2,500. So, a debit of $2,250 to Cash account decreases the previously credited $2,500 by $2,250 and records the correct credit amount of $250. Likewise, a credit of $2,250 to Salaries Expense account decreases the previously debited $2,500 by $2,250 and records the correct debit amount of $250. Hence, option (c) is correct...

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