Question

 Journalize the entries to correct the following errors:

 a. A purchase of supplies for $213 on account was recorded and posted as a debit to Supplies for $446 and as a credit to Accounts Receivable for $446. (Record the entry to reverse the error first.)

 b. A receipt of $4,410 from Fees Earned was recorded and posted as a debit to Fees Earned for $4,410 and a credit to Cash for $4,410.

Answer 1

Answer 2

SOLUTION :

a.

Explanation :

First reverse the wrong entries of debit to supply and credit to A R :

Date                   Account                               Debit              Credit

Xxxx      Supply                                              $446

                    

                  Accounts Receivable                                          $446

             

                 (purchase of supplies)

Explanation :

Then, enter correct entries as under :

               Supply                                                213

                  Accounts payable                                                  213

b.

Explanation :

To correct this mistake, we have to neutralise the wrong debit amount and then credit the account. It means we have to enter credit entries for the double of the debited amount I.e $(4410 + $$10) = $ 8820 to correct the error and accordingly cash to be debited for that amount. Debit entry comes first.

Date               Account                                           Debit              Credit

Xxxx             Cash                                                $8,820

                           Fees Earned                                                       $8,820