Question

Posting errors are identified in the following table. In column (1), enter the amount of the difference between the two trial balance columns (debit and credit) due to the error. In column (2), identify the trial balance column (debit or credit) with the larger amount if they are not equal. In column (3), identify the account(s) affected by the error. In column (4), indicate the amount by which the account(s) in column (3) is under-or overstated. Item (a) is completed as an example. (Select "None" if there is no effect.) . (1) . (2) (3) Description of Posting Error Difference between Debit and Credit Columns Column with the Larger Total Identify Account(s) Incorrectly Stated L . (4) Amount That Account(s) Over-or Understated $ 180 Credit Rent Expense Rent Expense is understated by $180 $1,750 debit to Rent Expense is posted as a $1,570 debit $3,500 credit to Cash is posted twice as two credits to Cash. C. $7,000 debit to the Withdrawals account is debited to Owner's Capital. $1,600 debit to Prepaid Insurance is posted as a debit to Insurance Expense. $30,625 debit to Machinery is posted as a debit to Accounts Payable. $4,400 credit to Services Revenue is posted as a $440 credit. g. $790 debit to Store Supplies is not posted.

Answer 1

	Description of Posting Error	(1) Difference between Debit and Credit Columns	(2) Column with the Larger Total	(3) Identify Account(s) Incorrectly Stated	(4) Amount that Account(s) Over-or Understated
a.	$1,750 debit to Rent Expense is posted as a $1,570 debit.	$180.00	Credit	Rent Expense	Rent Expense is understated by $180
b.	$3,500 credit to Cash is posted twice as two credits to Cash	$3,500.00	Credit	Cash	Cash Balance is Understated by $3,500
c.	$7,000 debit to Withdrawals account is debited to Owners' Capital	$7,000.00	Debit	Owners Capital	Owners Capital is understated by $7,000
		$7,000.00	Credit	Withdrawals Account	Withdrawals Account is Underrstated by $7,000
		Net Effect in Trial Balance is NIL
d.	$1,600 debit to Prepaid Insurance is posted as a debit to Insurance Expense	$1,600.00	Debit	Insurance Expense	Insurance Expense is Overstated by $1,600
		$1,600.00	Credit	Prepaid Insurance	Prepaid Insurance is Understated by $1,600
		Net Effect in Trial Balance is NIL
e.	$30,625 debit to Machinery is posted as a debit to Accounts Payable	$30,625.00	Credit	Machinery	Machinery is understated by $ 30,625
		$30,625.00	Debit	Accounts Payable	Accounts Payable is understated by $30,625
		Net Effect in Trial Balance is NIL
f.	$4,400 Credit to Services Revenue is posted as a $440 Credit	$3,960.00	Debit	Services Revenue	Services Revenue is understated by $3,960
g.	$790 debit to Store Supplies is not posted	$790.00	Credit	Store Supplies	Store Supplies is understated by $790