Instead of preparing a correcting entry, it is possible to reverse the incorrect entry and then prepare the correct entry. This approach will result in more entries and postings than a correcting entry, but it will accomplish the desired result. Accounting Across the Organization Yale Express Lost in Transportation On the other hand, Republic Carloading, a nationwide, long- Yale Express, a short-haul distance freight forwarder, frequently did not receive transportation bills from truckers to whom it passed on cargo until months after the trucking firm, turned over year-end. In making its year-end adjusting entries. Republic waited much of its cargo to local for months in order to include all of these outstanding transporta- truckers to complete deliver- tion bills. ies. Yale collected the entire When Yale Express merged with Republic Carloading, delivery charge. When billed Yale's vice president employed the 20-day cutoff procedure for by the local trucker, Yale sent both firms. As a result, millions of dollars of Republic's ac- payment for the final phase to crued transportation bills went unrecorded. When the company the local trucker. Yale used a detected the error and made correcting entries, these and other cutoff period of 20 days into errors changed a reported profit of $1.14 million into a loss of the next accounting period in $1.88 million! making its adjusting entries for accrued liabilities. That is, it waited 20 days to receive the local truckers' bills to deter- What might Yale Express's vice president have done to produce mine the amount of the unpaid more accurate financial statements without waiting months for Christian Lagercek/iStockphoto but incurred delivery charges Republic's outstanding transportation bills? (Go to WileyPLUS as of the balance sheet date. for this answer and additional questions.) a10 DO IT! 3 Correcting Entries Sanchez Company discovered the following errors made in January 2020. 1. A payment of Salaries and Wages Expense of S600 was debited to Supplies and credited to Cash, both for $600. 2. A collection of $3,000 from a client on account was debited to Cash $200 and credited to Service Revenue $200 3. The purchase of supplies on account for $860 was debited to Supplies 5680 and credited to Ac- counts Payable $680. Correct the errors without reversing the incorrect entry ACTION PLAN . Compare the incorrect entry with correct entry. . After comparison, make an entry to correct the accounts