Question

. Courtney Meehan has trouble keeping her debits and credits equal. During a recent month, Courtney made the following accounting errors: a. In preparing the trial balance, Courtney omitted a $5,000 notes payable. The debit to Cash was correct. b. Courtney posted a $1,000 utilities expense as $100. The credit to Cash was correct. c. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable. d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct. e. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120. Requirements: R1. For each of these errors, state whether total debits equal total credits on the trial balance. R2. Identify each account that has an incorrect balance and the amount and direction of the error (e.g., “Accounts Receivable $500 too high”).

Answer 1

1
a.	Total debits	>	Total Credits
b.	Total debits	<	Total Credits
c.	Total debits	=	Total Credits
d.	Total debits	<	Total Credits
e.	Total debits	=	Total Credits
2			Amount	Direction of Error
a.	Note payable		$5,000	Too low
b.	Utilities expense		$900	Too low
c.	Furniture		$600	Too high
	Accounts payable		$600	Too high
d.	Cash		$450	Too low
e.	Office Supplies		$90	Too low
	Accounts Payable		$90	Too low