During the bank reconciliation process, an accountant identified an error. A check written for $20 to pay a supplier for goods purchased on credit was erroneously recorded in the company's records for $200. Which of the following entries would correct this error?

Question

Quizplus · Accepted Answer

The error involves the recording of a payment made to a supplier, which means the Accounts Payable account is involved. The correct entry to correct the error would be to decrease the amount recorded in the Cash account by $180 (the difference between the actual payment of $20 and the recorded payment of $200) and decrease the Accounts Payable account by $180. Therefore, choice A is the correct answer. The other options do not address the error correctly since they do not reflect the correction of the Accounts Payable account. The supplier's personnel would not be responsible for correcting an error in the company's own records.

During the Bank Reconciliation Process, an Accountant Identified an Error