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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Correcting entries

The following errors took place in journalizing and posting transactions:

a.    The receipt of $8,400 for services rendered was recorded as a debit to Accounts Receivable and a credit to Fees Earned.

b.    The purchase of supplies of $2,500 on account was recorded as a debit to Office Equipment and a credit to Supplies.

Journalize the entries to correct the errors. Omit explanations.

To determine

Errors not affecting trial balance:

An error is a mistake committed in the process of book-keeping or in accounting.  In some cases, errors may occur but, they will not affect the totals of the trial balance. Such an error can be found while preparing the trial balance or would be indicated by the unusual account balance. For Example, Crediting land account. If such errors have already been journalized, and posted to the ledger, then they should be corrected by preparing a correcting journal entry.

To journalize: The entries to correct the errors.

Explanation

a. Journalize the correcting entry to correct the error of the payment from a customer on account.

Cash 8,400  
     Accounts receivable   8,400

Table (1)

  • In the above correcting entry, the incorrect entry of debit to accounts receivable account is reversed by debiting the cash account, and crediting the accounts receivable account by $8,400.

b. Journalize the correcting entry to correct the error of the purchase of supplies on account...

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