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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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During the current month, the following errors occurred in recording transactions in the purchases journal or in posting from it:

a.    An invoice for $1,875 of supplies from Kelly Co. was recorded as having been received from Kelley Co., another supplier.

b.    A credit of $420 to Blackstone Company was posted as $240 in the subsidiary ledger.

c.    An invoice for equipment of $4,800 was recorded as $4,000.

d.    The Accounts Payable column of the purchases journal was overstated by $3,600.

To determine

Purchase journal

Purchase journal refers to the journal that is used to record all purchases on account. In the purchase journal, all purchase transactions are recorded only when the business purchased the goods on account. For example, the business purchased cleaning supplies on account.

To explain: The manner in which the errors will be noticed by the bookkeeper.

Explanation

The errors may be noticed by the bookkeeper by following manner.

a. Invoice of $1,875 – when Company K will send an overdue notice or Company Ke will intimidate the overpayment to the buyer.

b. Credit of $420 is posted as $240 – this error either will be noticed at the time of payment of invoice or when the accounts payable schedule will not match with the balance of accounts payable...

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