Find the Accounting Error | 20 Challenges With Explanations
Accounting Unlock: 20 journal entry and transaction error challenges, with correct-answer explanations included in answer-reveal narration. 16:9. No music.
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Quiz Questions & Answers
Review every prompt, the correct responses, and helpful context to prep for your own run-through.
Question 1: A business buys $2,000 of equipment for cash. Which journal entry correctly records the transaction?
Debit Equipment $2,000; Credit Cash $2,000
Debit Cash $2,000; Credit Equipment $2,000
Debit Equipment $2,000; Credit Accounts Payable $2,000
Debit Equipment $2,000; Credit Owner's Capital $2,000
Question 2: A business pays $600 cash for rent relating to the current month. Which entry is correct?
Debit Rent Expense $600; Credit Cash $600
Debit Rent Expense $600; Credit Accounts Payable $600
Debit Cash $600; Credit Rent Expense $600
Debit Prepaid Rent $600; Credit Cash $600
Question 3: A business receives $1,500 cash from a customer for services performed today. Which account is wrongly credited in the entry Debit Cash $1,500; Credit Accounts Receivable $1,500?
Accounts Receivable
Cash
Service Revenue
Unearned Revenue
Question 4: Under a perpetual inventory system, a business buys $900 inventory on credit. Which entry is correct?
Debit Inventory $900; Credit Accounts Payable $900
Debit Accounts Payable $900; Credit Inventory $900
Debit Inventory $900; Credit Cash $900
Debit Purchases $900; Credit Accounts Payable $900
Question 5: An owner invests $5,000 cash in a sole proprietorship. The entry is Debit Cash $5,000; Credit Sales Revenue $5,000. What is the error?
Cash should be credited
Sales Revenue should be debited
Owner's Capital should be credited instead
Accounts Payable should be credited instead
Question 6: A business pays an existing $700 account payable in cash. Which account is incorrectly debited in Debit Utilities Expense $700; Credit Cash $700?
Cash
Accounts Receivable
Service Revenue
Utilities Expense
Question 7: A business receives $1,200 cash for services to be delivered next month. Which account is incorrectly credited in Debit Cash $1,200; Credit Service Revenue $1,200?
Service Revenue
Cash
Accounts Receivable
Owner's Capital
Question 8: A business earns $2,300 by providing services on account. Which entry is correct, replacing an erroneous cash receipt entry?
Debit Cash; Credit Service Revenue
Debit Accounts Receivable; Credit Service Revenue
Debit Service Revenue; Credit Accounts Receivable
Debit Accounts Payable; Credit Service Revenue
Question 9: A company buys a $4,000 machine by paying $1,000 cash and signing a $3,000 note. Which part is missing from Debit Equipment $4,000; Credit Cash $1,000?
Debit Notes Payable $3,000
Debit Cash $3,000
Credit Notes Payable $3,000
Credit Equipment $3,000
Question 10: A business collects $850 from a customer who owed money. The entry is Debit Cash $850; Credit Service Revenue $850. What is wrong?
Cash should be credited
Service Revenue should be debited
Accounts Payable should be credited
Accounts Receivable should be credited
Question 11: A company pays $1,200 for a one-year insurance policy starting today and records Debit Insurance Expense $1,200; Credit Cash $1,200. Under an initial asset-recognition policy, what is the error?
Prepaid Insurance should be debited instead
Cash should be debited instead
Insurance Revenue should be credited instead
Accounts Payable should be credited instead
Question 12: At month-end, $400 of wages are earned but unpaid. The entry is Debit Wages Expense $400; Credit Cash $400. What should replace Cash?
Wages Expense
Wages Payable
Accounts Receivable
Prepaid Wages
Question 13: A company records $300 monthly depreciation as Debit Accumulated Depreciation $300; Credit Depreciation Expense $300. What is the problem?
Both accounts should be debited
Cash should be credited instead
The debit and credit are reversed
Equipment should be debited instead
Question 14: A company receives a $10,000 bank loan. Its entry is Debit Cash $10,000; Credit Owner's Capital $10,000. What is the error?
Cash should be credited
Revenue should be credited
Interest Expense should be debited
Notes Payable should be credited
Question 15: A company earns $500 of previously unearned revenue. The entry is Debit Cash $500; Credit Service Revenue $500. Which debit is needed instead?
Unearned Revenue
Accounts Receivable
Service Revenue
Prepaid Expense
Question 16: A sole proprietor withdraws $400 cash for personal use. The entry is Debit Salary Expense $400; Credit Cash $400. Which debit is appropriate?
Owner's Capital contribution
Owner's Drawings
Accounts Payable
Service Revenue
Question 17: A retailer sells goods for $1,000 cash; the inventory cost is $600. Under a perpetual inventory system, only Debit Cash $1,000; Credit Sales Revenue $1,000 was recorded. What is missing?
Debit Inventory $600; Credit Cost of Goods Sold $600
Debit Cash $600; Credit Inventory $600
Debit Cost of Goods Sold $600; Credit Inventory $600
Debit Sales Revenue $600; Credit Inventory $600
Question 18: A company buys $700 supplies on credit. It records Debit Supplies $700; Credit Cash $700. Which credit is required?
Supplies Expense
Accounts Receivable
Service Revenue
Accounts Payable
Question 19: A company pays a $250 dividend in cash. It records Debit Utilities Expense $250; Credit Cash $250. What is wrong?
Dividends (or Retained Earnings) should be debited
Cash should be debited
Accounts Payable should be credited
Dividend Revenue should be credited
Question 20: A business receives a $2,000 invoice for repairs completed this month, payable next month. It records Debit Repairs Expense $2,000; Credit Cash $2,000. What should be credited?
Repairs Revenue
Accounts Payable
Prepaid Repairs
Accounts Receivable