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A firm purchased telephone equipment for cash. By mistake, the person who recorded the transaction debited Utilities Expense instead of Office Equipment. The error was discovered after the data posted. The correcting entry should contain _______.

Respuesta :

Answer:

a debit to Office Equipment and a credit to Utilities expense

Explanation:

The correct journal entry should've been:

Office Equipment A/C                                    Dr.

     To Cash A/C

(Being purchase of telephone equipment recorded)

The wrong entry passed being,

Utilities Expenses A/C                                   Dr.

    To Cash A/C

Thus, the rectification/correcting entry should be:

Office Equipment A/C                                    Dr.

    To Utilities Expense A/C

(Being correcting entry recorded)

Telephone equipment is used for official purpose and thus an office expenditure. Expenses incurred are debited.

Similarly, Utilities Expenses was wrongly debited so crediting it cancels out the wrong effect.

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