The following journal entries were prepared by an employee of Global Travel Agency who does not have an adequate knowledge of accounting.

INSTRUCTIONS

Examine the journal entries carefully to locate the errors. Prepare journal entries to correct the errors. Assume that Office Equipment and Office Supplies were recorded at the correct values. However, the items were paid for entirely in cash, not on credit. Assume the errors are found and corrected on the last day of the month.

Table Summary: 

General journal, page 1 is shown. Date, description, post ref, debit, and credit are the five column heads. Post ref column is blank. Three entries are shown with debit values filled first followed by credit values with account names. Description is at the bottom of each entry.

Analyze: 

After the correcting journal entries have been posted, what effect do the correcting entries have on the company’s reported assets?

Transcribed Image Text:

General Journal Date Description 20X1 April 1 Accounts Payable Fees Income Performed services on credit 2 Cash Telephone Expense Paid for March telephone service, check 1905 3 Office Equipment Office Supplies Accounts Payable Purchased file cabinet and office supplies, check 1906 Post. Ref. Debit 17,200.00 875.00 9,300.00 1,020.00 Page 1 Credit 17,200.00 875.00 10,320.00