Ramirez Company has employed a bookkeeper who is inexperienced. On December 28,

Question

Ramirez Company has employed a bookkeeper who is inexperienced. On December 28, after reviewing the records for the year, you discover the following error. On May 1, Ramirez Company purchased Supplies on account, $730. The bookkeeper recorded this by debiting Supplies Expense for $370 and crediting Cash for $370. Note: Assume that it is the company's policy to record the purchase of supplies in the Supplies account. Required: Prepare a correcting entry on December 28. Make sure to enter the day for each separate transaction.

Explanation / Answer

Correcting entry :

Date accounts & explanation debit credit Supplies 730 Supplies expense 370 Cash 360 (To record correcting entry)

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