Question

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Bertrand Inc. purchased some shop equipment for $5,600 in cash. By mistake, the journal entry debited...

Bertrand Inc. purchased some shop equipment for $5,600 in cash. By mistake, the journal entry debited the Office Equipment account rather than the Shop Equipment account. What correcting entry would be necessary?

Multiple Choice:

  • 1. Debit Office Equipment $5,600; credit Shop Equipment $5,600

  • 2. Debit Office Equipment $5,600; credit Cash $5,600

  • 3. Debit Cash $5,600; credit Shop Equipment $5,600

  • 4. Debit Shop Equipment $5,600; credit Office Equipment $5,600

Solutions

Expert Solution

The wrong entry was:

Debit Office Equipment - $ 5,600

Credit Cash - $ 5,600

The correct entry should have been:

Debit Shop Equipment - $ 5,600

Credit Cash - $ 5,600

Cash has been credited correctly, only Office Equipment has been debited wrongly, hence to correct it, we have to credit Office Equipment and debit the correct account which would be Shop Equipment.

Hence, the correcting entry would be:

Debit Shop Equipment - $ 5,600

Credit Office Equipment - $ 5,600

Hence, the correct answer would be Option 4

ekkarill92 answered 2 years ago
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