ACCA Applied Knowledge · Financial Accounting · Trial balance
A business discovers that a $750 payment of electricity was debited to the rent expense account. What is the correct journal to correct this error?
The correcting journal is debit electricity $750 and credit rent $750. The payment was debited to the wrong expense account, so the amount must be moved from rent to electricity. Suspense is not used because the trial balance still balanced.
- ADr Electricity $750, Cr Rent $750Correct
- BDr Rent $750, Cr Electricity $750
- CDr Electricity $750, Cr Suspense $750
- DDr Suspense $750, Cr Rent $750
Explanation
The debit went to the wrong expense account, an error of commission. The electricity expense is understated and rent overstated, so debit electricity and credit rent by $750. No suspense is involved because the trial balance still balanced.
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