A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?
A) debit Accounts Payable; credit Cash
B) debit Cash; credit Accounts Receivable
C) debit Cash; credit Accounts Payable
D) debit Accounts Receivable; credit Cash

Question

Quizplus · Accepted Answer

The company underpaid by $270 due to the recording error. To correct this, they need to debit Accounts Payable to increase the liability back to the correct amount and credit Cash to reflect the correct cash outflow.

A Check Drawn by a Company in Payment of a Voucher