Module 5: Correcting Entry

Illustrative Erroneous Entry:

1. Collection of a customer’s account amounting to ₱2,500 was recorded as Debit Accounts Receivable ₱2,500, and Credit Cash ₱2,500
2. Payment of supplier’s account amounting to ₱8,100 was recorded as Debit Accounts Payable ₱1,800, and Credit Cash ₱1,800
3. Office supplies of ₱1,400 purchased on account was debited to Office Supplies ₱1,400 and credited to Cash ₱1,400
4. Service worth 10,000 was rendered, with ₱4,000 received in cash and the remainder on credit. This was recorded as Debit Cash, ₱6,000; Debit Accounts Receivable ₱4,000;
and credit Belarmino, Capital ₱10,000

Wrong Entry Should be Entry Correcting Entry

1 Accounts Receivable 2,500 Cash 2,500 5,000
Cash 2500 Accounts Receivable 2,500 Accounts Receivable 5,000

2 Accounts Payable 1,800 Accounts Payable 8,100 Accounts Payable` 6,300

Cash 1,800 Cash 8,100 Cash 6,300

3 Office Supplies 1,400 Office Supplies 1,400 Cash 1,400

Cash 1,400 Accounts Payable 1,400 Accounts Payable 1,400

4 Cash 6,000 Cash 4,000 Accounts Receivable 2,000

Accounts Receivable 4,000 Accounts Receivable 6,000 Belarmino, Capital 10,000
Belarmino, Capital 10,000 Service Revenue 10,000 Cash 2,000
Service Revenue 10,000
Cr. - A/P 1,800
Dr. - A/P 8,100
Net Dr. - A/P 6,300
Dr. – Cash 1,800
Cr. – Cash 8,100
Net Cr. – Cash 6,300

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Module 5: Correcting Entry
Exercise:
1. Office furniture purchased for ₱5,000 in cash was debited to Office Equipment ₱5,000 and credited to Cash ₱5,000
2. Payment of electric bill ₱3,600 was recorded as Debit Supplies Expense ₱360 and Credit Cash ₱360
3. Office Equipment worth ₱12,800 was purchased on account with a 25% down payment. This was debited to Accounts Payable ₱3,200 and Cash ₱9,600; and credited to
Office Supplies ₱12,800
4. Owner’s additional investment of ₱15,000 was debited to Belarmino, Drawing ₱51,000 and Credited to Cash ₱51,000

Wrong Entry Should be Entry Correcting Entry

1 Office Equipment 5,000 Office Furniture 5,000 Office Furniture 5,000
Cash 5,000 Cash 5,000 Office Equipment 5,000

2 Supplies Expense 360 Utilities Expense 3,600 Utilities Expense 3,600

Cash 360 Cash 3,600 Cash 3,240
Supplies Expense 360

3 Accounts Payable 3,200 Office Equipment 12,800 Office Equipment 12,800

Cash 9,600 Cash 3,200 Office Supplies 12,800
Office Supplies 12,800 Accounts Payable 9,600 Cash 12,800
Accounts Payable 12,800

4 Belarmino, Drawing 51,000 Cash 15,000 Cash 66,000

Cash 51,000 Belarmino, Capital 15,000 Belarmino, Capital 15,000
Belarmino, Drawing 51,000

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