Question

policies
current attempt in progress
blue company paid $870 on account to a creditor. the transaction was erroneously recorded as a debit to cash of $780 and a credit to accounts receivable, $780. the correcting entry is
○ accounts receivable 780
cash 780
○ accounts payable 870
cash 870
○ accounts receivable 780
accounts payable 870
cash 1650
○ accounts receivable 780
accounts payable 780

Explanation:

Step1: Identify correct entry

Correct entry: Debit Accounts Payable $\$870$, Credit Cash $\$870$

Step2: Identify erroneous entry

Erroneous entry: Debit Cash $\$780$, Credit Accounts Receivable $\$780$

Step3: Derive correcting entry

Reverse error: Debit Accounts Receivable $\$780$, Credit Cash $\$780$. Then record correct entry: Debit Accounts Payable $\$870$, Credit Cash $\$870$. Combine: Debit Accounts Receivable $\$780$, Debit Accounts Payable $\$870$, Credit Cash $\$780+\$870=\$1650$

Answer:

Accounts Receivable 780
Accounts Payable 870
Cash 1650