• 1 Marks

FA – Nov 2015 – L1 – SA – Q7 – Correction of Errors

This question asks for the correct journal entry to rectify an error in recording staff uniform expenses.

Abiao Company purchased security staff uniform for N250,000. The Accounts Officer felt that the amount was too high to be charged to expenses and consequently debited the amount to the office equipment account.
The journal entry to correct this error is:
A. Dr. Staff uniform account Cr. Office equipment account
B. Dr. Staff uniform account Cr. Suspense account
C. Dr. Office equipment account Cr. Suspense account
D. Dr. Office equipment account Cr. Staff uniform account
E. Dr. Purchases account Cr. Office equipment account

A. Dr. Staff uniform account Cr. Office equipment account

Explanation:
To correct the error, you need to transfer the amount from the office equipment account back to the staff uniform account. Therefore, you debit the Staff uniform account and credit the Office equipment account to reflect the correct expense allocation.

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