FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
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Chapter 3, Problem 22Q
(a)
To determine
Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare 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 financial statement.
Balancing of trial balance:
Trial balance may balance even when any of the following errors occurs:
- 1) a transaction is not journalized,
- 2) a correct
journal entry is not posted in the ledger, - 3) a journal entry is posted twice,
- 4) incorrect accounts are used in journalizing or posting, or
- 5) Compensating errors are made
To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.
(b)
To determine
To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.
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For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.a. The payment of cash for the purchase of office equipment of $12,900 was debited to Land for $12,900 and credited to Cash for $12,900.b. The payment of $1,840 on account was debited to Accounts Payable for $184 and credited to Cash for $1,840.c. The receipt of cash on account of $3,800 was recorded as a debit to Cash for $8,300 and a credit to Accounts Receivable for $3,800.
Which of the following errors would cause a trial balance to have unequal totals? Explain your answers.
a.A payment to a creditor was recorded as a debit to Accounts Payable for $129 and as a credit to Cash for $102.
b.A payment of $150 to a creditor for an account payable was debited to Accounts Receivable and credited to Cash.
c.A purchase of office supplies of $420 was recorded as a debit to Office Supplies for $42 and as a credit to Cash for $42.
d.A purchase of equipment for $450 was recorded as a debit to Supplies for $450 and as a credit to Cash for $450.
An employee working on her first trial balance discovers that the Equipment account has a credit balance of $2500 and a customer's A/R account has a credit balance of $25.
Based on the knowledge you have gained in this course and how account balances are recorded and increase/decrease, has the accountant made a mistake in her records or are these situations possible?
Chapter 3 Solutions
FINANCIAL ACCOUNTING>IC<
Ch. 3 - Prob. 1QCh. 3 - Can a business enter into a transaction that...Ch. 3 - Are the followingevents recorded in the accounting...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Misty Reno, a beginning accounting student,...Ch. 3 - Prob. 9QCh. 3 - What is the normal balance for each of these...
Ch. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 15QCh. 3 - (a) When entering a transaction in the journal,...Ch. 3 - (a) Should accounting transaction debits and...Ch. 3 - Journalize these accounting transactions. (a)...Ch. 3 - Prob. 19QCh. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - Prob. 22QCh. 3 - Prob. 3.1BECh. 3 - Prob. 3.2BECh. 3 - Prob. 3.3BECh. 3 - For each of the following accounts, indicate the...Ch. 3 - Prob. 3.5BECh. 3 - Prob. 3.6BECh. 3 - Prob. 3.7BECh. 3 - Tilton Corporation has the following transactions...Ch. 3 - Prob. 3.9BECh. 3 - Selected transactions for Montes Company are...Ch. 3 - Prob. 3.11BECh. 3 - Prob. 3.12BECh. 3 - Prob. 3.1DIECh. 3 - Prob. 3.2DIECh. 3 - Prob. 3.3DIECh. 3 - Prob. 3.4DIECh. 3 - Prob. 3.5DIECh. 3 - Prob. 3.1ECh. 3 - Prob. 3.2ECh. 3 - Prob. 3.3ECh. 3 - Prob. 3.4ECh. 3 - Prob. 3.5ECh. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Prob. 3.10ECh. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Prob. 3.1APCh. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Prob. 3.4APCh. 3 - Prob. 3.5APCh. 3 - Prob. 3.6APCh. 3 - Prob. 3.7APCh. 3 - Prob. 3.8APCh. 3 - Prob. 3.9APCh. 3 - Prob. 3.10APCh. 3 - Prob. 3.11APCh. 3 - Prob. 3.1EYCTCh. 3 - Prob. 3.2EYCTCh. 3 - Prob. 3.3EYCTCh. 3 - Prob. 3.4EYCTCh. 3 - Prob. 3.6EYCTCh. 3 - Prob. 3.7EYCTCh. 3 - Prob. 3.8EYCTCh. 3 - Prob. 3.9EYCTCh. 3 - Prob. 3.11EYCTCh. 3 - Prob. 3.1IFRS
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- Would the following errors cause the trial balance to have equal or unequal totals? As a result of the errors, which accounts are overstated (by how much) or understated (by how much)? a. A purchase of office equipment for 380 was recorded as a debit to Office Equipment for 38 and a credit to Cash for 38. b. A payment of 280 to a creditor was debited to Accounts Receivable and credited to Cash for 280 each. c. A purchase of supplies for 245 was recorded as a debit to Equipment for 245 and a credit to Cash for 245. d. A payment of 76 to a creditor was recorded as a debit to Accounts Payable for 76 and a credit to Cash for 67.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_forwardThe Colby Group has the following unadjusted trial balance as of August 31, 2019: The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was understated by 6,000. b. A cash receipt of 5,600 was posted as a debit to Cash of 6,500. c. A debit of 11,000 to Accounts Receivable was not posted. d. A return of 150 of defective supplies was erroneously posted as a 1,500 credit to Supplies. e. An insurance policy acquired at a cost of 1,200 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was understated by 20,000. g. A credit of 4,800 in Accounts Payable was overlooked when determining the balance of the account. h. A debit of 7,000 for a withdrawal by the owner was posted as a credit to Terry Colby, Capital. i. The balance of 58,100 in Rent Expense was entered as 51,800 in the trial balance. j. Gas, Electricity, and Water Expense, with a balance of 24,150, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of August 31, 2019. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.arrow_forward
- Jetson Corp. performed services for a customer worth $500 and the customer will pay for those services next month. When the transaction was journalized, however, Jetson's accountant debited the "Cash" account and credited the "Service Revenue" account for $500 each. Question: As a result of this error, which of the following statements is/are true? (check all that apply) Select one or more: a. Total debits and total credits will still equal but the balance sheet equation will not be satisfied. b. Total debits and total credits will still equal and the balance sheet equation will be satisfied. c. The "Accounts Receivable" account balance will be too low (understated) while the "Cash" account balance will be too high (overstated). d. The "Accounts Receivable" account balance will be too low (understated) while the "Service Revenue" account balance will be too high (overstated).arrow_forwardIn the trial balance below, total debits do not equal total credits. Find and correct the likely error(s) to bring the totals into balance. Debit Credit Cash 158,000 Office Supplies 25,000 Equipment 180,000 Accum. Depreciation—Equipment 44,000 Accounts Payable 47,700 Wages Payable 13,000 W. Shannon, Capital 20,970 W. Shannon, Withdrawals 25,000 Entertainment Revenue 338,000 Rent Expense 26,800 Gas and Oil Expense 3,000 Wage Expense 219,700 Advertising Expense 12,500 Legal Expense 11,400 Totals 636.400 488,670 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardWhich of the following errors, each considered individually, would cause the trial balance totals to be unequal? A payment of $481 to a creditor was posted as a debit of $4,819 to Accounts Payable and a credit of $481 to Cash. A transaction was not posted. Cash received from customers on account was posted as a debit of $163 to Cash and a credit of $163 to Accounts Payable. A payment of $90 for insurance was posted as a debit of $40 to Prepaid Insurance and a credit of $40 to Cash.arrow_forward
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- Which of the following errors will affect the Trial balance? a. Electricity paid OMR 2,000: Debit Telephone RO 2,000 and Credit Cash RO 2,000 b. Salary paid OMR 500: Debit Salary OMR 500 and Credit Cash OMR 500 c. Business paid OMR 89 telephone expenses were recorded OMR 98 in both the accounts d. Stationery expense OMR 50 : Debit Stationery OMR 50 Credit Cash OMR 500arrow_forwardWhich of the following errors, each considered individually, would cause the trial balance totals to be unequal? Question 14 options: A payment of $248 to a creditor was posted as a debit of $248 to Accounts Payable and a debit of $248 to Accounts Receivable Cash received from customers on account was posted as a debit of $450 to Cash and a credit of $450 to Accounts Payable. A payment of $79 for supplies was posted as a debit of $97 to Supplies and a credit of $97 to Cash A transaction was not posted.arrow_forwardMs. Noor is an Account Assistant of a Merchandise business in Oman. The business paid monthly salaries to all employees of OMR 7000. Ms. Noor was asked to record the transaction. But due to her busy schedule she forgot to record the entire transaction. The type of Error was committed by Ms. Noor: a. Error of Principle b. Error of Transposition c. Error of Partial Omission d. Error Complete Omissionarrow_forward
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