A check drawn by a company for $360 in payment of a liability was recorded in the journal as $630.What entry is required in the company's accounts?
A) debit Accounts Payable; credit Cash
B) debit Cash; credit Accounts Receivable
C) debit Cash; credit Accounts Payable
D) debit Accounts Receivable; credit Cash

Question

Quizplus · Accepted Answer

The correct entry required in the company's accounts is to debit Cash for the correct amount of $360, and credit Accounts Payable for the correct amount of $360. This will correct the error and reflect the proper payment of the liability in the accounts. A and D are incorrect because they involve debiting or crediting the wrong accounts, and B is incorrect because it involves Accounts Receivable instead of Accounts Payable.

A Check Drawn by a Company for $360 in Payment