Question

While preparing the bank reconciliaon for March, the accountant for Bertran Industries discovered that a $649 check in payment of an account payable had been entered incorrectly in the journal as $694. Which of the following is true?

A. An adjusting entry must be made to debit Cash and credit Accounts Payable for $45.

B. An adjusng entry must be made to debit Accounts Payable and credit Cash for $45.

C. The bank should be notied, and the bank should correct its records by adding $45 to the company's account.

D. No entry is needed for the reconciling item because it appears on the bank's side of the reconciliaon.

Answer 1

The correct action for Bertran Industries' incorrect entry is to make an adjusting entry to debit Accounts Payable and credit Cash for the $45 difference.

Step-by-step explanation:

When the accountant for Bertran Industries discovered that a $649 check payment was incorrectly entered in the journal as $694, the correct action to take is B: An adjusting entry must be made to debit Accounts Payable and credit Cash for $45. This is because the original entry overstates the cash disbursement and the liability. The journal needs to reflect the actual amount paid of $649, so a $45 difference needs to be reconciled with an adjusting entry.