Correcting Entries
The following errors took place in journalizing and posting transactions:
a. A withdrawal of $ 6,000 by Cheri Ramey, owner of the business, was recorded as a debit to Office Salaries Expense and a credit to Cash.
b. Utilities Expense of $ 4,500 paid for the current month was recorded as a debit to Miscellaneous Expense and a credit to Accounts Payable.
Journalize the entries to correct the errors. Omit explanations.
a. Cheri Ramey, Drawing ……………………………………….. 6,000
Office Salaries Expense ………………………………… 6,000
b. Accounts Payable…………………………………………………. 4,500
Miscellaneous Expense ………………………………… 4,500
Utilities Expense ……………………………………………………… 4,500
Cash…………………………………………………………………….. 4,500
Note: The first entry in (b) reverses the incorrect entry, and the second entry records the correct entry. These two entries could also be combined into one entry; however, preparing two entries will make it easier for someone later to understand what had happened and why the entries were necessary.