Correcting Erroneous Credit in Bank Account Steps:

• Identify error: Rent payment of $270 debited rent account correctly but credited bank account, wrongly increasing bank balance.
• Determine impact: Bank should be debited $270 to reflect cash outflow; incorrect credit must be reversed.
• Prepare correcting entry: Debit bank $270 to reverse the credit and reduce balance.
• Balance with suspense: Credit suspense $270 to temporarily hold the adjustment until full rectification.

Why A is correct:

• Reverses the incorrect credit by debiting bank, aligning with double-entry principle where payments reduce assets like bank.

Why the others are wrong:

• B: Credits bank, further increasing balance and compounding the error.
• C: Identical to B, incorrectly credits bank instead of debiting.
• D: Uses $520, which exceeds the$270 error and violates matching principle for corrections.

Final answer: A