A transaction was recorded as a debit to Phone expense and a credit to Cash. After reviewing the trial balance and searching, we find that the debit should have gone to Utilities expense. The correction would be:

Question

Quizplus · Accepted Answer

The correct way to fix the error is to debit Utilities expense and credit Phone expense. This corrects the initial misclassification by moving the expense from Phone expense to Utilities expense, without affecting the cash account.

A Transaction Was Recorded as a Debit to Phone Expense