Question

Lewis Company has employed a bookkeeper who is inexperienced. On December 29, after reviewing the records for the year, you discover the following error. On June 1, Lewis Company paid a supplier $300 on account. The bookkeeper recorded this by debiting Cash for $300 and crediting Accounts Payable for $300.
Required:
Prepare a correcting entry on December 26.

Answer 1

Answer:

See below

Explanation:

With regards to the above, wrong entry was;

Cash a/c Dr $300

................................ To Accounts payable Cr $300

However, the correct entry shid have been;

Accounts payable Dr $600

..............................To Cash $600 Cr

(Being an amount paid by Lewis company to a supplier)

Supplies expenses Dr $300

................To Cash $300