Question

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?
a. debit Accounts Payable; credit Cash.
b. debit Cash; credit Accounts Receivable.
c. debit Cash; credit Accounts Payable.
d. debit Accounts Receivable; credit Cash.

Answer 1

Answer:

d. debit Accounts Receivable; credit Cash

Explanation:

The cash has been credited with $695 instead of $965 which means that $270 has been credited short. Same way, the liabilities have been debited by $270 short. So, we will have to reverse the entry ie. debit Accounts Receivable; credit Cash