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.) Difference betweenColumn Debit and with the Identify Account(s) Incorrectly Stated Description of Posting Error Amount That Account(s) Over-or Understated Larger Credit Total Columns $2,710 debit to Rent Expense is posted as a $2,170 debit. $5,420 credit to Cash is posted twice as two credits to Cash $ 540 Credit Rent Expense Rent Expense is understated by $540 $10,840 debit to the Withdrawals account is debited to Owner's Capital с . d$2,560 debit to Prepaid Insurance is posted as a debit to Insurance Expense $47,425 debit to Machinery is posted as a debit to Accounts Payable

Answer 1

Required details are as completed below:

	Difference between Debit and Credit Column	Column with the larger total	Identify accounts incorrectly stated	Amount that account(s) Over or understated
a	540	Credit	Rent Expense	Rent Expense is understated by $540
b	5,420	Credit	Cash account	Cash account is understated by $5,420
c	None	None	Withdrawals and Owner's capital	Withdrawal account is overstated by $10,840 and Owner's Capital account is understated by 10,840
d	None	None	Prepaid Insurance and Insurance Expense	Insurance Expense is overstated by $2,560 and Prepaid Insurance account is understated by $2,560
e	None	None	Machinery and Accounts Payable	Machinery account is understated by $47,425 and accounts payable account is understated by $47,425
f	5688	Debit	Service Revenue	Service Revenue is understated by $5,688
g	1,750	Credit	Store Supplies	Store Supplies is understated by $1,750