FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Question
Chapter 2, Problem 23E
To determine
Introduction: The financial statements of a company include a balance sheet, income statement, and
To state: The impact of a transaction error.
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Students have asked these similar questions
A journal entry for a $700 payment for Prepaid Rent was erroneously recorded as a debit to Prepaid Rent for $100. and a credit to Cash for $700. Which of the
following statements correctly states the effect of the error on the trial balance?
A. The sum of the debits will exceed the sum of the credits by $600.
B.
The sum of the credits will exceed the sum of the debits by $600.
C.
The sum of the debits will exceed the sum of the credits by $100.
D. The sum of the credits will exceed the sum of the debits by $100.
0 0 0 0
4. Complete the following chart to show the effect of errors on a trial balance
Trial balance
will not balance
Trial balance will
Debits
Credits
balance but will
greater than
greater than
not be correct
Error Situation
credits by ($) debits by ($)
(r)
A. A transaction for $500 was
journalized and posted as $50.
B. A debit of $200 to Bank was posted
to a customer's account.
c. An account with a credit balance of
$300 in the ledger was placed on the
debit side of the trial balance.
D. A Supplies balance of $500 was not
placed on the trial balance.
E. A credit of $200 was posted twice.
F. An entire journal entry for $350 was
not posted.
G. The Revenue account balance of
$42 000 was listed on the trial
Page 4
You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error. Specifically, a correctly journalized credit purchase of an automobile for $18,950 is posted from the journal to the ledger with an $18,950 debit to Automobiles and another $18,950 debit to Accounts Payable. The Automobiles account has a debit balance of $37,100 on the trial balance. (1) Answer each of the following questions and (2) compute the dollar amount of any misstatement for parts a through d. a. Is the Debit column total of the trial balance overstated, understated, or correctly stated? b. Is the Credit column total of the trial balance overstated, understated, or correctly stated? c. Is the Automobiles account balance overstated, understated, or correctly stated in the trial balance? d. Is the Accounts Payable account balance overstated, understated, or correctly stated in the trial balance? e. If the Debit column total of the trial balance is $200,000 before…
Chapter 2 Solutions
FUND.ACCT.PRIN.
Ch. 2 - Identifying source documents C1 Identify the items...Ch. 2 - Identifying financial statement accounts C2...Ch. 2 - Reading a chart of accounts C3 A chart of accounts...Ch. 2 - Identifying normal balance C4 Identify the normal...Ch. 2 - QS 2–5
Linking debit or credit with normal...Ch. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QS
Ch. 2 - Prob. 11QSCh. 2 - Prob. 12QSCh. 2 - Prob. 13QSCh. 2 - Prob. 14QSCh. 2 - Prob. 15QSCh. 2 - Prob. 16QSCh. 2 - Prob. 17QSCh. 2 - Prob. 18QSCh. 2 - Prob. 19QSCh. 2 - Exercise 21 Steps in analyzing and recording...Ch. 2 - Prob. 2ECh. 2 - Prob. 3ECh. 2 - Exercise 2-3 Identifying a ledger and chart of...Ch. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Exercise 2-10 Preparing a trial balance P2 After...Ch. 2 - Prob. 13ECh. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Prob. 21ECh. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 25ECh. 2 - Prob. 26ECh. 2 - Prob. 27ECh. 2 - Prob. 28ECh. 2 - Prob. 29ECh. 2 - Prob. 1PSACh. 2 - Prob. 2PSACh. 2 - Prob. 3PSACh. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 6PSACh. 2 - Prob. 7PSACh. 2 - Prob. 1PSBCh. 2 - Prob. 2PSBCh. 2 - Prob. 3PSBCh. 2 - Prob. 4PSBCh. 2 - Problem 2-5B Computing net income from equity...Ch. 2 - Prob. 6PSBCh. 2 - Problem 2-7B Preparing an income statement,...Ch. 2 - SP 2 On October 1, 2019, Santana Rey launched a...Ch. 2 - Using transactions from the following assignments...Ch. 2 - Prob. 2GLPCh. 2 - Prob. 3GLPCh. 2 - Prob. 4GLPCh. 2 - Prob. 5GLPCh. 2 - Prob. 6GLPCh. 2 - Prob. 7GLPCh. 2 - Prob. 8GLPCh. 2 - Refer to Apple's financial statements in Appendix...Ch. 2 - Prob. 2AACh. 2 - Key comparative figures for Apple, Google, and...Ch. 2 - Prob. 1DQCh. 2 - What is the difference between a note payable and...Ch. 2 - Prob. 3DQCh. 2 - What kinds of transactions can be recorded in a...Ch. 2 - Are debits or credits typically listed first in...Ch. 2 - Should a transaction be recorded first in a...Ch. 2 - If assets are valuable resources asset accounts...Ch. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Identify the four financial statements of a...Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Prob. 1BTNCh. 2 - Prob. 2BTNCh. 2 - Prob. 3BTNCh. 2 - Prob. 4BTNCh. 2 - Prob. 5BTNCh. 2 - Prob. 6BTN
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Similar questions
- You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error. Specifically, a correctly journalized credit purchase of an automobile for $18,950 is posted from the journal to the ledger with an $18,950 debit to Automobiles and another $18,950 debit to Accounts Payable. The Automobiles account has a debit balance of $37,100 on the trial balance. (1) Answer each of the following questions and (2) compute the dollar amount of any misstatement for parts a through d.arrow_forwardA journal entry for a $75 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash. Which of the following statements correctly states the effect of the error on the trial balance? O A. The sum of the debits will exceed the sum of the credits by $75. O B. The sum of the debits will exceed the sum of the credits by $150. O C. The sum of the credits will equal the sum of the debits. O D. The sum of the credits will exceed the sum of the debits by $150.arrow_forward1. While reviewing a trial balance, you notice the following account balances. Which one is likely to be an error? a. Inventory with a debit balance of $43,000 b. Discount on Bonds Payable with a debit balance of $4,000 c. Accumulated Depreciation with a debit balance of $8,000 d. Allowance for Doubtful Accounts with a credit balance of $23,000 2. Debiting an insurance payment to Rent Expense instead of Insurance Expense is an example of... a. an accrual error b. a deferral error c. a classification error d. use of an incorrect accounting principle 3. InCo. recorded a customer's $20,000 check as a $20,000 debit to Cash and as a $2,000 credit to Accounts Receivable. This is an example of: a. an oversight b. an incorrect account classification c. a transposition error d. a slide error 4. During a bank reconciliation, a deposit recorded by the bank but not in the company's ledger Cash account is... a. added to both the bank balance and the ledger Cash account balance b. added to the…arrow_forward
- 8. If a $335.00 debit item in the general journal is posted as a debit for $353.00, and as a credit for the correct amount of $335.00 a) By how much will the trial balance be out of balance? $ b) Will the debits be understated or overstated?_ c) What do accountants call this type of error?arrow_forwardThe bookkeeper for Nevado Company has prepared the following trial balance: The bookkeeper has asked for your help. In examining the companys journal and ledger, you discover the following errors. Use this information to construct a corrected trial balance. a. The debits to the Cash account total 8,000, and the credits total 3,300. b. A 500 payment to a creditor was entered in the journal correctly but was not posted to the Accounts Payable account. c. The first two numbers in the balance of the Accounts Receivable account were transposed when the balance was copied from the ledger to the trial balance. d. The 1,500 amount withdrawn by the owner for personal use was debited to Miscellaneous Expense by mistakeit was correctly credited to Cash.arrow_forwardA credit sales of RM5,000 to Rima was credited to the Sales Account, but wrongly debited in Rama account (a debtor). What is the type of error made? Error of original entry Error of commission Compensating error Error of omissionarrow_forward
- Ajournal entry for a $220 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $500 and a credit to Cash for $220. Which of the following statements correctly states the effect of the error on the trial balance? O A. The sum of the credits will exceed the sum of the debits by $280. O B. The sum of the debits will exceed the sum of the credits by $220. O C. The sum of the debits will exceed the sum of the credits by $500, O D. The sum of the debits will exceed the sum of the credits by $280.arrow_forwardAfter preparing the trial balance, the accountant finds that the total of debit side is OMR 125,600 and Total of Credit Side OMR 126,500. This difference should be treated before rectification of errors was a. Debit Suspense account with OMR 900 b. Suspense account should be cancelled with OMR 1800 c. Debit Suspense account OMR 125,600 and Credit Trial Balance OMR 126,500 d. Credit Suspense account with OMR 900arrow_forwardJournalize the entries to correct the following errors: a. A purchase of supplies for $201 on account was recorded and posted as a debit to Supplies for $595 and as a credit to Accounts Receivable for $595. (Record the entry to reverse the error first.) If an amount box does not require an entry, leave it blank. b. A receipt of $5,900 from Fees Earned was recorded and posted as a debit to Fees Earned for $5,900 and a credit to Cash for $5,900. If an amount box does not require an entry, leave it blank.arrow_forward
- A trial balance has total debits of $20,000 and total credits of $24,500. Which one of the following errors would create this imbalance? Explain. a. A $2,250 debit to Utilities Expense in a journal entry was incorrectly posted to the ledger as a $2,250 credit, leaving the Utilities Expense account with a $3,000 debit balance. b. A $4,500 debit to Salaries Expense in a journal entry was incorrectly posted to the ledger as a $4,500 credit, leaving the Salaries Expense account with a $750 debit balance. c. A $2,250 credit to Consulting Fees Earned (Revenues) in a journal entry was incorrectly posted to the ledger as a $2,250 debit, leaving the Consulting Fees Earned account with a $6,300 credit balance. d. A $2,250 debit posting to Accounts Receivable was posted mistakenly to Land. e. A $4,500 debit posting to Equipment was posted mistakenly to Cash. f. An entry debiting Cash and crediting Accounts Payable for $4,500 was mistakenly not posted.arrow_forwardA trial balance has total debits of $29,000 and total credits of $38,000. Which one of the following errors would create this imbalance? Multiple Choice A $4,500 credit to Consulting Revenue in a journal entry was incorrectly posted to the ledger as a $4,500 debit, leaving the Consulting Revenue account with a $10,800 credit balance. A $9,000 debit to Salaries Expense in a journal entry was incorrectly posted to the ledger as a $9,000 credit, leaving the Salaries Expense account with a $1, 650 debit balance. A $4,500 debit to Utilities Expense in a journal entry was incorrectly posted to the ledger as a $4,500 credit, leaving the Utilities Expense account with a $5,250 debit balance. A $9,000 debit posting to Equipment was posted mistakenly to Cash. A $4,500 debit posting to Accounts Receivable was posted mistakenly to Land. An entry debiting Cash and crediting Accounts Payable for $9,000 was mistakenly not posted.arrow_forwardbalance. In searching for the error, an employee discovered that a transaction for the The trial balance prepared by Reynaldo Abas Consulting as at Sept. 30, 2023 was not in purchase of a typewriter on credit for P6,100 has been recorded by a debit of P6,100 to the Office Equipment account and a debit of P6,100 to Accounts Payable. The credit Problem #15 Effects of Errors on the Trial Balance balance. In searching for the error, an employee discovered that a transaction for 98 column of the incorrect trial balance had a total of P926,000. Was the Office Equipment account overstated, understated, or correctly stated in the trial balance? 0Tfakd a. b. Was the total of the debit column of the trial balance overstated, understated, or correctly stated? Was the Accounts Payable account overstated, understated, or correctly С. stated in the trial balance? d. Was the total of the credit column of the trial balance overstated, understated or correctly stated? How much was the total of the…arrow_forward
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