Question

Krug Company’s inexperienced bookkeeper places a question mark next to a journal entry if she is uncertain the entry is correct. Question marks appear next to each of the following entries in Krug’s accounting records.
(a) Accounts Receivable................................................... 4,000
Cash......................................................................... 4,000
To record collection of accounts receivable
(b) Office Equipment....................................................... 900
Cash...................................................................... 900
To record purchase of office supplies for cash
(c) Cleaning Supplies....................................................... 300
Accounts Payable..................................................... 300
To record purchase of cleaning supplies on credit
Required:
(a) Given each journal entry and its accompanying explanation, identify the nature of the error in the entry, if any, and how the entry should have been prepared.
(b) Given your responses in part (a), prepare any necessary correcting entries.
(c) Analyze each of the errors you identified in part (a) in reference to the accounting equation. How would these errors have affected the accounting equation of Krug Company, if at all?


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  • CreatedMarch 27, 2015
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