A firm purchased telephone equipment for cash.By mistake,the person who recorded the transaction debited Utilities Expense instead of Office Equipment.The error was discovered after the data posted.The correcting entry should contain

Question

Quizplus · Accepted Answer

Since the original entry was debited to Utilities Expense instead of Office Equipment, the correcting entry should debit Office Equipment (the correct account) and credit Utilities Expense (the account that was wrongly debited). There is no need for a cash or revenue account as the error does not involve these accounts.

A Firm Purchased Telephone Equipment for Cash