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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

FINDING AND CORRECTING ERRORS On May 25, after the transactions had been posted, Joe Adams discovered that the following entry contains an error. The cash received represents a collection on account, rather than new service fees. Correct the error in the general journal using a correcting entry.

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To determine

Prepare the correct entry for the error in the general journal.

Explanation

Correcting entry:

When an incorrect entry is journalized and posted to wrong account it must be corrected using the proper entry. As a result, while there is an occurrence of error the correcting entry is required to be made.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Ø  Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Ø  Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

Prepare the correct entry for the error in the general journal.

DateAccounts title and explanation

Post.

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