Ask Question
BusinessBusiness
20 February, 23:57

When Alexander Company purchased supplies for cash for $500, it incorrectly recorded the journal entry as a debit to Supplies of $5,000 and a credit to Cash of $5,000. Before correcting this error:

a. Cash is understated and Supplies is overstated

b. Cash is overstated and Supplies is overstated

c. Cash is understated and Supplies is understated

d. Cash is overstated and Supplies is understated

+3
Answers (1)
  1. 21 February, 00:10
    0
    Answer: Before correcting this error:

    "a. Cash is understated and Supplies is overstated"

    Explanation: By incorrectly registering a debit of $ 5000 in the supply account we are exaggerating the supplies, because the registration would indicate that the company has $ 5000 in supplies, when in fact it is not.

    And the cash would be underestimated because we really only spent $ 500 of cash and the registration of the credit in the cash account would indicate that the company spent $ 5000, and it really isn't.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “When Alexander Company purchased supplies for cash for $500, it incorrectly recorded the journal entry as a debit to Supplies of $5,000 and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
It is the beginning of the year and you receive your first W-2 form. After filling out your taxes you realize that you are going to have to pay the IRS.
Answers (1)
In the triple bottom line era, businesses emphasize the need to maximize which three components as "bottom lines"
Answers (1)
The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be: Multiple Choice An equal amount of cost for each department. Number of customers to enter each department.
Answers (1)
California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2018.
Answers (2)
To properly address a business envelope, you should use A. boldface type for the ZIP code. B. a flush-right margin. C. all capital letters. D. four spaces between the city and state.
Answers (1)
New Questions in Business
Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated total overhead costs to be $480,000, and direct labor costs to be $240,000.
Answers (1)
Samuel is working on his annotated bibliography. While writing his annotations, he copies and pastes materials from his sources into his annotations without using quotation marks. This is
Answers (1)
Vanessa's snowboard manufacturing company has encountered problems with one of its computerized decal makers. Vanessa might get someone from the Maintenance, Installation and Repair Pathway of the Manufacturing career cluster to fix the issue.
Answers (1)
You can save $3,000 per year for the next five years in an account earning 8 percent per year. how much will you have at the end of the fifth year if you make the first deposit today? (do not round intermediate calculations.
No Answers
Where did the demand for national prohibition originate?
Answers (1)
Home » Business » When Alexander Company purchased supplies for cash for $500, it incorrectly recorded the journal entry as a debit to Supplies of $5,000 and a credit to Cash of $5,000. Before correcting this error: a. Cash is understated and Supplies is overstated b.
Sign Up Forgot Password?