Accounting for IGCSE & O level - Accounting Procedures (Section 24 - No. 2)
What journal entry is required to correct the error where a purchase of equipment for $1,000 by cheque has been recorded in the asset account for equipment but was not credited to the bank account?
Debit Equipment $1,000; Credit Bank $1,000
Debit Equipment $1,000; Credit Purchases $1,000
Debit Bank $1,000; Credit Equipment $1,000
No correction needed, the entry is correct.
Explanation
The correct entry for equipment purchased by cheque is to debit the equipment account and credit the bank account.
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