Question

Quality Services Inc. made the following accounting errors during a recent month.

Requirement:

Prepare the necessary adjusting journal entries to correct these errors.

1. The company recorded a $450 purchase of supplies on account by debiting Supplies and crediting Accounts payable for $540.

2. In journalizing a receipt of cash for service revenue, cash was debited for $120 instead of the correct amount of $1200. The credit was correct.

3. In recording an $800 payment on account, Accounts receivable was credited instead of cash.

4. A $600 salary expense was posted $6000. The credit to accounts payable was correct.

Answer 1

Solution:

Adjusting Journal Entries
S. no.	Accounts and explanation	Debit	Credit
1	Accounts Payable Dr ($540-$450)	$90
	To Supplies		$90
2	Cash Dr ($1200- $120)	$1,080
3	Accounts Receivable Dr	$800
	To Cash		$800
4	To Salary Expense ($6000-$600)		$5,400