Correcting Misclassification of Expenses to Asset Account

Steps:

• Identify error: $50 expense incorrectly debited to motor vehicles (asset) instead of motor vehicle expenses.
• Determine correction: Debit motor vehicle expenses $50 to record properly; credit motor vehicles$50 to reverse incorrect debit.
• Apply double-entry: Ensures balanced ledger by transferring amount from asset to expense.
• Select matching entry: Choose option showing debit to expenses and credit to asset.

Why A is correct:

• Follows double-entry bookkeeping rule: Debit expense account $50 and credit asset account$50 to reclassify and balance accounts.

Why the others are wrong:

• B: Uses invalid account name "motor vehicles expenses," violating standard chart of accounts.
• C: Debits asset account further with unclear $100, worsening the error without crediting expenses.
• D: Introduces suspense account unnecessarily with mismatched $100 debit, not addressing the specific misclassification.

Final answer: A