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Chapter 2: 25E_1 (page 98)

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 1. For each of these errors, state whether total debits equal total credits on the trial balance.

Short Answer

Expert verified

Total debit and credit are equal in transaction c and e.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Service Revenue

The service revenue is defined as the amount of money received by the business in exchange for providing the services to the clients.

02

Step 2:Stating whether total debit or total credit

Transaction Number

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

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Most popular questions from this chapter

Question:The accounts of Anderson Moving Company follow with their normal balances as of August 31, 2018. The accounts are listed in no particular order. Common Stock \( 49,800 Trucks \) 123,000 Insurance Expense 600 Fuel Expense 1,000 Accounts Payable 4,000 Dividends 5,600 Service Revenue 82,000 Utilities Expense 300 Building 41,000 Accounts Receivable 10,000 Advertising Expense 200 Notes Payable 56,000 Salaries Expense 6,000 Office Supplies 100 Cash 4,000 Prepare Anderson鈥檚 trial balance as of August 31, 2018.

Calculating the balance of a T-account

Accounts Payable

May 2 6,000 21,000 May 1

May 22 11,500 500 May 5

8,500 May 15

500 May 23

Calculate the Accounts Payable balance.

Identifying increases and decreases in accounts For each account, identify whether the changes would be recorded as a debit (DR) or credit (CR). a. Increase to Accounts Receivable b. Decrease to Unearned Revenue c. Decrease to Cash d. Increase to Interest Expense e. Increase to Salaries Payable f. Decrease to Prepaid Rent g. Increase to Common Stock h. Increase to Notes Receivable i. Decrease to Accounts Payable j. Increase to Interest Revenue

Creating a chart of accounts Raymond Autobody Shop has the following accounts:

Accounts Payable Service Revenue

Cash Equipment

Utilities Expense Common Stock

Automotive Supplies Advertising Expense

Dividends Unearned Revenue

Retained Earnings

Create a chart of accounts for Raymond Autobody Shop using the standard numbering system. Each account is separated by a factor of 10. For example, the first asset account will be 100 and the next asset account will 110

Journalizing transactions

Harper Sales Consultants completed the following transactions during the latter part of January:

Jan. 22 Performed services for customers on account, \(7,500.

30 Received cash on account from customers, \)8,000.

31 Received a utility bill, \(220, which will be paid during February.

31 Paid monthly salary to salesman, \)2,500.

31 Received \(2,310 for three months of consulting service to be performed starting in February.

31 Cash dividends of \)950 were paid to stockholders.

Journalize the transactions of Harper Sales Consultants. Include an explanation with each journal entry.
See all solutions

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