Question Details

An unacceptable way to make a correcting entry


1.	A correcting entry
a.	must involve one statement of financial position account and one income statement account.
b.	is another name for a closing entry.
c.	may involve any combination of accounts.
d.	is a required step in the accounting cycle.


	2.	An unacceptable way to make a correcting entry is to
a.	reverse the incorrect entry.
b.	erase the incorrect entry.
c.	compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts.
d.	correct it immediately upon discovery.

3.	Farr Company paid the weekly payroll on January 2 by debiting Wages Expense for $45,000. The accountant preparing the payroll entry overlooked the fact that Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is
a.	Wages Payable		27,000
		Cash			27,000
b.	Cash		18,000
		Wages Expense			18,000
c.	Wages Payable		27,000
		Wages Expense			27,000
d.	Cash		27,000
		Wages Expense			27,000


4.	Stine Company paid €530 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of €350 and a credit to Accounts Receivable, €350. The correcting entry is
a.	Accounts Payable		530
		Cash			530
b.	Accounts Receivable		350
		Cash			350
c.	Accounts Receivable		350
		Accounts Payable			350
d.	Accounts Receivable		350
	Accounts Payable		530
		Cash			880

5.	A lawyer collected $830 of legal fees in advance. He erroneously debited Cash for $380 and credited Accounts Receivable for $380. The correcting entry is
a.	Cash		380
	Accounts Receivable		450
		Unearned Revenue			830
b.	Cash		830
		Service Revenue			830
c.	Cash		450
	Accounts Receivable		380
		Unearned Revenue			830
d.	Cash		450
		Accounts Receivable			450




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