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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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Effect of errors on adjusted trial balance

For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

  1. a. The adjustment of $9,800 for accrued fees earned was journalized as a debit to Accounts Receivable for $9,800 and a credit to Fees Earned for $8,900.
  2. b. The adjustment of depreciation of $3,600 was omitted from the end-of-period adjusting entries.

(a)

To determine

Adjusted Trial Balance

Adjusted trial balance is a trial balance prepared at the end of a financial period, after all the adjusting entries are journalized and posted. It is prepared to prove the equality of the total debit and credit balances.

Adjusting Entries

Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

To indicate: The errors made that would cause the trial balance totals to be unequal

Explanation

 For accrued fees earned, accounts receivable is debited for $9,800 and fees earned are credited for $8,900. The trial balance totals are unequal as the amount posted to debit column is higher with a...

(b)

To determine

To indicate: The errors made would cause the trial balance totals to be unequal, and whether their balance gets higher, and by how much.

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