Question

Roswell College requires students to pay tuition each term before class begin. Students who have not paid their tuition are not allowed to enroll or to attend classes. Cindy Jones the accountant for the school has been asked by her boss to prepare the required journal entry for the receipt of the students' tuition payments. In addition Cindy Jones has been asked by her boss to prepare a trial balance for Roswell College at the end of the current month. When preparing the trial balance Cindy Jones discovers that the credit side of the trial balance exceeds the debit side by a material amount. Cindy has decided to add the difference to balance of the miscellaneous expense account in order to complete the preparation of the current months financial statements by her 5 o'clock deadline. Discuss what journal entry should be recorded for the tuition payments and why the journal entry would be appropriate. Also, discuss whether Cindy Jones is behaving in an ethical and professional manner concerning her actions with the preparation of the trial balance. You are required to have an original post responding to my questions asked (Minimum of 4-5 legitimate sentences required) and reply to at least 1 of your classmates' commentaries (Minimum of 2 - 3 legitimate sentences required). Make sure to use a Professional Writing Style. This online discussion will be graded at 35 points.

Answer 1

1.Journal entry which needs to be passed is-

• Bank/Cash A/c Debit
• Tution fees A/c Credit

Appropriateness Reason-

In above entry,

Bank/Cash A/c is debited because it is Real A/c & rule of real a/c is debit 'what comes in' & credit 'what goes out', here Bank/Cash amount is coming to the College.Therefore, debited.

Tution fees A/c is credited because it is Nominal A/c & rule of Nominal A/c is debit 'all expenses/losses' & credit 'all gains/incomes', here Tution fees A/c is gain/income.Therefore, credited.

2.In the given case-

Cindy Jones discovers that credit side amount of Trial Balance is in excess of debit side amount of Trial Balance by material amount. So, she has entered wrongly miscellaneous expense A/c debit balance by the difference amount.

Ethically & Professionally-

Cindy Jones is wrong in doing above entry, as Trial balance should be presented in true manner so that all accounts balances are presented properly & finally debit & credit balances of accounts should be equal. If Debit & Credit balances are not equal it means there is some error. The difference can't be adjusted to any account.