In: Accounting
On August 1, supplies were purchased; Accounts Payable was debited and Supplies credited for $1,500. The account was due in October, and $700 of these supplies were on hand at the end of August. The entry to correct the accounts at August 31:
>Accounts payable being debited by $ 1500 when this should have been CREDITED.
>Supplies account credited by $ 1500 when this should have been DEBITED.
>for Accounts payable = $ 1500
credit
>for Supplies = $ 700 debit
>for Supplies expense = $ 800 debit.
Accounts payable |
Supplies |
Supplies expenses |
|
Correct balances that should exist |
$ 1,500.00 credit |
$ 700.00 debit |
$ 800.00 debit |
Existing 'wrong balance' |
$ 1,500.00 debit |
$ 1,500.00 credit |
$ - |
Adjustment for correct entry |
$ 3,000.00 to be CREDITED [1500 for removing debit balance and another 1500 for making balance $1500 credit] |
$ 2,200.00 to be DEBITED [1500 for removing credit balance and then $ 700 for making balance $700 debit] |
$ 800.00 to be DEBITED [to record expenses] |
Date |
Accounts Title |
Debit |
Credit |
31-Aug |
Supplies |
$ 2,200.00 |
|
Supplies expenses |
$ 800.00 |
||
Accounts payable |
$ 3,000.00 |
||
(entry to correct accounts) |