A $375 purchase of supplies on account was recorded by debiting supplies for $375 and crediting cash for $375. What journal entry is needed to correct this error

Answer :

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Answer:

The journal entry to correct the error is a debit of $375 on the supplies expense account and a corresponding credit of $375 to the cash account.

Explanation:

A journal entry in accounting is a detailed record of all the financial transactions made during a certain period in time. The records are always used for reconciliation and transfer to more permanent account such as a ledger. A journal usually consists of; the specific dates when transaction was made, a description of the transaction and the amounts involved. A journal entry typically utilizes the double digit entry of book keeping. The double-entry system usually involves two columns of recording the amounts involved, namely; debit and credit.

The purchase of supplies using cash affects two major accounts, namely; cash account and the supplies expense account. In our case, a purchase of $375 on supplies increases the supplies expense account while cash account is decreased. To record this, we debit the supplies expense by $375 and credit the cash account by $375. This can be represented in a table as follows;

Account                               Debit                               Credit

Supplies expense               $375

Cash                                                                             $375

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