David journalized and posted an entry for $2,000 debit to Cash; and $2,000 credit to Service Fees. The correct amount on the billing was $200. The entry to correct this error is
A) debit Cash, $1,800; credit Service Fees, $1,800.
B) debit Service Fees, $1,800; credit Cash, $1,800.
C) debit Service Fees, $2,800; credit Cash, $2,000.
D) debit Service Fees, $200; credit Cash, $200.

Question

Quizplus · Accepted Answer

The correct entry to correct the error involves debiting Service Fees and crediting Cash for the difference of $1,800 ($2,000 - $200), which reverses the overstatement of both accounts.

David Journalized and Posted an Entry for $2,000 Debit to Cash;