Question

Effect of Errors on Trial Balance The following errors occurred in posting from a two-column journal: A credit of $8,350 to Accounts Payable was not posted. A debit of $2,010 to Cash was posted to Miscellaneous Expense. A credit of $270 to Cash was posted as $720. A debit of $5,820 to Wages Expense was posted as $5,280. An entry debiting Accounts Receivable and crediting Fees Earned for $21,700 was not posted. A debit of $600 to Accounts Payable was posted as a credit. A debit of $1,310 to Supplies was posted twice. Considering each case individually (i.e., assuming that no other errors had occurred): (a) Indicate by "yes" or "no" whether the trial balance would be out of balance. (b) If the answer to (a) is "yes", indicate the amount by which the trial balance totals would differ. (c) Indicate whether the debit or credit column of the trial balance would have the larger total. If "no", enter "0" in the difference column and select "neither" from the drop box under "Larger Total". Enter all amounts as positive numbers. Answers should be presented in the following form, with error (1) given as an example: Error Out of Balance Difference Larger Total 1. Yes $8,350 Debit 2. No $ Neither 3. Yes $ Credit 4. Yes $ Credit 5. No $ Neither 6. Yes $ Credit 7. Yes $ Debit

Answer 1

Error Out of balance Larger Total Debit Difference Explanation Yes 8,350 i $ Neither 2 No =720 - 270 450 ! Credit 3 Yes 4 Yes 540 Credit =5,820 - 5,280 i $ Neither No 6 * 1,200 ! Yes Credit =600 + 600 1,310 : Debit Yes Rectification Entry -- $600 again increased to accounts payable, therefore we need to reduce $600 first from accounts payable -- Secondly again debit $600 for recording the payment