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Chapter 2: Q16RQ (page 90)
If total debits equal total credits on the trial balance, is the trial balance error-free? Explain your answer.
There could be an error in the trial balance even if the debits and credits are equal.
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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
For each account, identify if the change would be recorded as a debit (DR) or credit (CR).
11. Increase to Cash 16. Increase to Interest Revenue
12. Decrease to Accounts Payable 17. Increase to Rent Expense
13. Increase to Common Stock 18. Decrease to Office Supplies
14. Increase to Unearned Revenue 19. Increase to Prepaid Rent
15. Decrease to Accounts Receivable 20. Increase to Notes Payable
Question: Correcting errors in a trial balance
The following trial balance of Joy McDowell Tutoring Service as of May 31, 2018, does not balance.
Account Title Office Supplies Cash Debit Credit Accounts Receivable Computer Equipment Accounts Payable Utilities Payable Common Stock Dividends Service Revenue Salaries Expense Utilities Expense Rent Expense Total Balance \( 33,100 11,600 \) 11,100 9,600 800 \( 2,800 \) 35,000 1,900 800 700 2,000 600 15,800 10,400
Investigation of the accounting records reveals that the bookkeeper:
a. Recorded a \(400 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct.
b. Posted a \)2,000 credit to Accounts Payable as \(200.
c. Did not record Utilities Expense or the related Utilities Payable in the amount of \)300.
d. Understated Common Stock by $100.
Prepare the corrected trial balance as of May 31, 2018, complete with a heading; journal entries are not required.
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.
Question:Preparing a trial balance from T-accounts
The T-accounts of McMahon Farm Equipment Repair follow as of May 31, 2018.
ASSETS Salaries Payable LIABILITIES EQUITY Retained Earnings 4,000 29,000 Notes Payable 3,500 400 Accounts Receivable 14,000 Land 29,000 Building 16,000 Equipment Common Stock Contributed Capital Dividends Property Tax Expense 1,000 Advertising Expense 280
Cash 31,000 1,800 400 14,000 4,200 800 4,000 2,000 3,380
Service Revenue 3,500 1,800 4,200 31,000 2
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