Question

An accountant has debited an account for $4,300 and credited a liability account for $2,200. Which...

An accountant has debited an account for $4,300 and credited a liability account for $2,200. Which of the following would be an incorrect way to complete the recording of this transaction?

Credit an expense account for $2,100.

Credit the owner's capital account for $2,100.

Credit another liability account for $2,100.

Debit another asset account for $2,100.

Credit another asset account for $2,100.

Business   Accounting   
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Homework Answers

Answer #1
  • While recording a journal entry, total of accounts debited and credit MUST BE EQUAL.
  • In the given question, $ 4,300 has been debited, while only $ 2,200 are credited.
  • This means that Credit side is short by $ 2,100.
  • Hence, another account(s) must be Credited by $ 2,100 to make the journal entry complete.
  • Therefore, Correct answer is Option #4: “Debit another asset account for $ 2,100” is an incorrect way to complete recording of this transaction.

This is because, if it is done, debit column total will increase to $ 6,400 while credit column total will remain $ 2,200

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