When Honest Abe received his paycheck, he realized that his employer made an error in computing his wages and overpaid him by $1,300. So he promptly returned the excess amount.
When the employer receives a check from Abe for the amount of the overpayment, which of the following journal entries will be made by the employer?
A) Debit Cash and credit Wages Expense
B) Debit Wages Expense and credit Cash
C) Debit Cash and Credit Wages Payable
D) Debit Wages Payable and credit Wages Expense

Question

Quizplus · Accepted Answer

The employer will debit Cash to increase the cash account and credit Wages Expense to decrease the expense account, reflecting the correction of the overpayment.

When Honest Abe Received His Paycheck, He Realized That His