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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

The following errors were made in journalizing transactions. In each case, calculate the amount of the error and indicate whether the debit or the credit column of the trial balance will be understated or overstated.

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To determine

Calculate the amount of error and indicate whether the debit or the credit column of the trial balance will be understated or overstated.

Explanation

Trial balance:

Trial balance is the summary of accounts, and their debit and credit balances at a given time.  It is usually prepared at end of the accounting period.  Debit balances are listed in left   column and credit balances are listed in right column.  The totals of debit and credit column should be equal.  Trial balance is useful in the preparation of the financial statements.

In a trial balance, the normal balance of each account is on its increase side. Assets, drawings and expense would have debit balances (left side) while, Liabilities, capital and revenue would have credit balances (right side).

Compute the amount of error and indicate whether the debit or the credit column of the trial balance will be understated or overstated.

DescriptionAmount of DifferenceDebit or Credit columns of trial balance understated or overstated
0...

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