Question

On April 18, 20–, an accounting clerk discovered that an invoice for $250 was debited to the wrong expense account. The invoice was for advertising, but had been debited to the Rent Expense account. Prepare a correcting entry below.

Answer 1

As per given data here, on April 18, 20 accounting clerk has done mistake. He has debited Rent Expense Account by $250 instead of Advertising account.

Actual Advertising Expense Account should be debited but it has not been debited. So it will be Debited in correction entry.

Rent Expense account should not be debited but it is debited by mistake. So to nullify its effect, we have to Credit it by the same amount.

So, Correnction entry will be passed as under.

Advertising Expense Account Debit $250

To Rent Expense Account Credit $250

(Being rectification entry passed)