During May a check written by Pacifica Company for $167 for the purchase of supplies was incorrectly recorded by Pacifica for $176.The check was properly processed by the bank for $167.Use the following tabular analysis to determine the impact of the adjusting entry on Pacifica's accounts:

Question

Quizplus · Accepted Answer

Since the bank correctly processed the check for $167, Pacifica's cash should only be decreased by that amount. However, the original recording of $176 means that Pacifica's Supplies account is overstated by $9. Therefore, an adjusting entry needs to be made to decrease Supplies by $9 and balance the equation. So, the adjusting entry will increase Cash by $9 and decrease Supplies by $9.

During May a Check Written by Pacifica Company for $167