Question

The bookkeeper for Birmingham Corporation made these errors in journalizing and posting. For each error, indicate whether the trial balance will balance; if the trial balance will not balance, indicate the amount of the difference, and the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error 1 is given as an example. Error In Balance Difference Larger Column 1. No $400 Debit 2. Yes $ 0 None 3. Yes V $ 0 None A credit posting of $400 to Accounts Receivable was omitted. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense. A collection on account of $100 was journalized and posted as a debit to Cash $100 and a credit to Accounts Payable $100. A credit posting of $300 to Income Taxes Payable was made twice. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25. A debit of $395 to Advertising Expense was posted as $359. 4. No $ 300 Credit 5. Yes > $ 225 None 6. No 0+ 36 Credit

Answer 1

5. Difference = $0

It is given that the purchase of supplies worth $250 for cash is debited with $25 for supplies and $25 for cash.

The transaction is correct. Asset account is debited with increase and cash account being a real account is credited when it goes out.

The only issue is the amounts entered. As Debit amount and Credit amount are equal, even with wrong amounts the trail balance balances.