Question

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?
A. Credit an asset account for $800.
B. Credit another liability account for $800.
C. Credit a Stockholders' account for $800.
D. Debit a Stockholders' account for $800.

Answer 1

An accountant has debited an asset account for $1,300 and credited a liability account for $500 -The following would be an incorrect way to complete the recording of the transaction (D) Debit a Stockholders' account for $800.

Explanation:

By using  the accounting equation

Total assets = Total liabilities + Total stockholder equity

where,

Debited Total assets = $1,300

Credited Total liabilities = $500

So, the total stockholder equity is

= $1,300 - $500

= $800

So, the incorrect way is to debit a stockholder equity for $800