Question

A lawyer collected $860 of legal fees in advance. He erroneously debited Cash for $680 and credit Accounts Receivable for $860. The correcting entry is

Answer 1

Answer: The answer is as follows:

Explanation:

The correct entry for the transaction is:

Cash A/c......................Dr.                                             180

Accounts Receivable A/c..............Dr.                        680

To Unearned service Revenue A/c..................Cr.              860

( Corrected the erroneously debited Cash for $680 and credit Accounts Receivable for $680)