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Module 5 - Correcting Entries

The document describes four illustrative erroneous accounting entries and provides the correct entries. For each erroneous entry, it shows the wrong debits and credits that were recorded, and the proper debits and credits that should have been recorded instead. It also shows the correcting entry that needs to be made to fix the erroneous entries and properly record the transactions.

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Feiya Liu
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Download as DOCX, PDF, TXT or read online on Scribd
659 views

Module 5 - Correcting Entries

The document describes four illustrative erroneous accounting entries and provides the correct entries. For each erroneous entry, it shows the wrong debits and credits that were recorded, and the proper debits and credits that should have been recorded instead. It also shows the correcting entry that needs to be made to fix the erroneous entries and properly record the transactions.

Uploaded by

Feiya Liu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Module 5: Correcting Entry

Illustrative Erroneous Entry:


1. Collection of a customer’s account amounting to ₱2,500 was recorded as Debit Accounts Receivable ₱2,500, and Credit Cash ₱2,500
2. Payment of supplier’s account amounting to ₱8,100 was recorded as Debit Accounts Payable ₱1,800, and Credit Cash ₱1,800
3. Office supplies of ₱1,400 purchased on account was debited to Office Supplies ₱1,400 and credited to Cash ₱1,400
4. Service worth 10,000 was rendered, with ₱4,000 received in cash and the remainder on credit. This was recorded as Debit Cash, ₱6,000; Debit Accounts Receivable ₱4,000;
and credit Belarmino, Capital ₱10,000

Wrong Entry Should be Entry Correcting Entry


1 Accounts Receivable 2,500 Cash 2,500 5,000
Cash 2500 Accounts Receivable 2,500 Accounts Receivable 5,000

2 Accounts Payable 1,800 Accounts Payable 8,100 Accounts Payable` 6,300


Cash 1,800 Cash 8,100 Cash 6,300

3 Office Supplies 1,400 Office Supplies 1,400 Cash 1,400


Cash 1,400 Accounts Payable 1,400 Accounts Payable 1,400

4 Cash 6,000 Cash 4,000 Accounts Receivable 2,000


Accounts Receivable 4,000 Accounts Receivable 6,000 Belarmino, Capital 10,000
Belarmino, Capital 10,000 Service Revenue 10,000 Cash 2,000
Service Revenue 10,000
Cr. - A/P 1,800
Dr. - A/P 8,100
Net Dr. - A/P 6,300
Dr. – Cash 1,800
Cr. – Cash 8,100
Net Cr. – Cash 6,300

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Module 5: Correcting Entry
Exercise:
1. Office furniture purchased for ₱5,000 in cash was debited to Office Equipment ₱5,000 and credited to Cash ₱5,000
2. Payment of electric bill ₱3,600 was recorded as Debit Supplies Expense ₱360 and Credit Cash ₱360
3. Office Equipment worth ₱12,800 was purchased on account with a 25% down payment. This was debited to Accounts Payable ₱3,200 and Cash ₱9,600; and credited to
Office Supplies ₱12,800
4. Owner’s additional investment of ₱15,000 was debited to Belarmino, Drawing ₱51,000 and Credited to Cash ₱51,000

Wrong Entry Should be Entry Correcting Entry


1 Office Equipment 5,000 Office Furniture 5,000 Office Furniture 5,000
Cash 5,000 Cash 5,000 Office Equipment 5,000

2 Supplies Expense 360 Utilities Expense 3,600 Utilities Expense 3,600


Cash 360 Cash 3,600 Cash 3,240
Supplies Expense 360

3 Accounts Payable 3,200 Office Equipment 12,800 Office Equipment 12,800


Cash 9,600 Cash 3,200 Office Supplies 12,800
Office Supplies 12,800 Accounts Payable 9,600 Cash 12,800
Accounts Payable 12,800

4 Belarmino, Drawing 51,000 Cash 15,000 Cash 66,000


Cash 51,000 Belarmino, Capital 15,000 Belarmino, Capital 15,000
Belarmino, Drawing 51,000

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