Question

An accountant has debited an asset account for $500 and credited a revenue account for $1,000. what can be done to complete the recording of the transaction?

a. credit a different asset account for $500.
b. nothing further must be done.
c. debit another asset account for $500.
d. debit a shareholders' equity account for $500.

Answer 1

To balance the transaction where an asset account is debited for $500 and a revenue account is credited for $1,000, the correct action is to debit a shareholders' equity account for $500.

Step-by-step explanation:

The question involves a situation where an accountant has debited an asset account for $500 and credited a revenue account for $1,000. To ensure the transaction is accurately recorded and balanced as per the double-entry accounting system, an additional entry needs to be made.

The correct action to complete this recording would be option d: debit a shareholders' equity account for $500. This additional debit entry balances the overall transaction, keeping in line with the accounting equation: Assets = Liabilities + Shareholders' Equity.