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.) Description of Posting Error Difference between Column with Debit and Credit the Larger Columns 270 Credit Identify Account(s) Incorrectly stated Amount That Account(s) Over- or Understated Rent Expense Rent Expense is understated by $270 $1,960 debit to Rent Expense is posted as a $1,690 debit $3,920 credit to Cash is posted twice as two credits to Cash $7,840 debit to the Withdrawals account is debited to Common Stey $1,810 debit to Prepaid Insurance is d. posted as a debit to Insurance Expense $34,300 debit to Machinery is posted as a debit to Accounts Payable. $4,820 credit to Services Revenue is posted as a $482 credit $1,000 debit to Store Supplies is not posted.

Answer 1

Description of Posting Error Difference between Debit and Credit Columns Column with the Large Total Identify Accounts Incorrectly Stated Amount that Accounts is Over - or Understated a $270 Credit Rent expense Rent Expense is understated by $270 b. $3.920 Credit c. SO None $1,960 debit to Rent Expense is posted as a $1,690 debit. $3,920 credit to Cash is posted twice as two credits to Cash. $7,840 debit to the withdrawals account is debited to common stock. $1,810 debit to prepaid insurance is posted as a debit to insurance Expense. $34,300 debit to machinery is posted as a debit to Accounts Payable. $4,820 credit to Service Revenue is posted as a $482 credit $1,000 debit to store supplies is not posted Cash Cash is understated by $3.920 Capital and withdrawals both under by Withdrawals and capital $7,840 Prepaid Insurance and Insurance expense is overstated by $1,810 & Insurance expense Prepaid Insurance is understated by $1,810 Machinery and Accounts payable is understated by $34,300 Accounts payable & Machinery is understated by $34,300. d SO None e. SO None f. $4.338 Debit $1.000 Credit Service revenue Store Supplies Service revenue is understated by $4,338 Store supplies is understated by $1,000