Stine Company paid €530 on account to a creditor.The transaction was erroneously recorded as a debit to Cash of €350 and a credit to Accounts Receivable, €350.The correcting entry is

Question

Quizplus · Accepted Answer

The correcting entry should reverse the incorrect entry and record the correct transaction. The incorrect entry was a debit to Cash and a credit to Accounts Receivable for €350. The correct transaction should have been a debit to Accounts Payable and a credit to Cash for €530. Therefore, the correcting entry should debit Accounts Receivable for €350, debit Accounts Payable for €530, and credit Cash for €880 (to reverse the incorrect debit and record the correct credit).

Stine Company Paid €530 on Account to a Creditor Accounts Payable 530 Cash530\begin{array} { l }\text { Accounts Payable }&530 \\ \text { Cash}&&530 \\\end{array} Accounts Payable Cash​530​530​

Stine Company Paid €530 on Account to a Creditor $\begin{array} { l }\text { Accounts Payable }&530 \\ \text { Cash}&&530 \\\end{array}$