Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th
14th Edition
ISBN: 9781305878839
Author: Carl Warren, Jonathan Duchac, James M. Reeve
Publisher: Cengage Learning
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Question
Chapter 2, Problem 3DQ
(a)
To determine
Owner withdrawals:
Owner withdrawals refer to the withdrawals of money by the owner from the business for his/her personal use. This decreases the owner’s equity account. As owner’s drawing account is increased by debits, and decreased by credits, it has a normal debit balance.
To discuss: The cause of the unusual balance of the cash account with a credit balance of $1,850, assuming that no errors have occurred during journalizing, and posting.
(b)
To determine
To identify: Whether the credit balance of $1,850 in the cash account is an asset, a liability, owner’s equity, revenue, or an expense.
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Students have asked these similar questions
Frank Kane company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The accounts as of July 31 has a credit balance of K225 and there is no undeposited cash on hand.
a) Assuming that there were no errors in journalizing or posting, what is the explanation of this unusual balance?
b) Is the K225 credit balance in the cash account an asset, a liability, capital, a revenue or an expense?
Requirement 1:
ABC Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of December 31 has a credit balance of $1,850, and there is no undeposited cash on hand. (a) Assuming that no errors occurred during journalizing or posting, what caused this unusual balance? (b) Is the $1,850 credit balance in the cash account an asset, a liability, owner's equity, a revenue, or an expense?
Requirement 2:
Assume that DEF Company erroneously recorded the payment of $7,500 of owner withdrawals as a debit to Salary Expense. (a) How would this error affect the equality of the trial balance? (b) How would this error affect the income statement, statement of owner's equity, and balance sheet?
TSLA Co. found that the receipt of a check from a customer was properly recorded in th
accounting records for $7,426 but improperly credited by the bank in the amount of
$4,726. When preparing that month's bank reconciliation, the company should:
Add $2,700 to the bank statement balance of cash.
Add $2,700 to the book balance of cash.
educt $2,700 from the book balance of cash
O Deduct $2,700 from the bank statement balance of cash.
Chapter 2 Solutions
Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th
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