Update Apple ID setting

Re: "Update Apple ID setting"

You might want to check that you are logged in ok (to your Mac) with your Apple ID:

Sign in with your Apple ID - Apple Support

Also: If you want you can log-in to your account online to check or update your settings:

Apple ID sign in webpage:

https://appleid.apple.com/

If needed: If you forgot your Apple ID email address or phone number - Apple Support

If you forgot your Apple ID password - Apple Support

Get a verification code and sign in with two-factor authentication - Apple Support

Re: Mac: "is asking for your iphone password but stating it is incorrect"

Wondering if the Mac may be expecting the passcode for a previously signed-in (older) or a different device.

You could see if settings>general>about>name matches the name of the iPhone it is requesting the passcode for.

Else:

Sometimes restarting a Mac (Apple menu > Restart)

and

restarting an iPhone can restore order (deletes temporary files, re-establishes connections etc.

All the best:-)