When processing the accounts for Ellises Electrical Contractors, the following errors were made: (a) Electrical equipment purchased
Question:
When processing the accounts for Ellise’s Electrical Contractors, the following errors were made:
(a) Electrical equipment purchased for $7800 cash was debited to Equipment and credited to Accounts Payable for an incorrect amount of $8700.
(b) Collection of an account receivable for $4500 was recorded by a debit to Cash at Bank and a debit to the equity account of the owner.
(c) A cheque for $6000 issued to pay for an account payable was recorded as a debit to Accounts Payable and a credit to Accounts Receivable for $6000.
(d) A $2100 payment for assorted electrical tools was recorded as a debit to Equipment and a credit to Cash at Bank for $210.
(e) Cash of $2000 withdrawn by the owner from the business was debited to Salaries Expense and credited to Cash at Bank.
Required
A. Identify which of the above errors would cause unequal totals in a trial balance prepared at the end of the period.
B. Write a brief explanation for each error to indicate how it could be fixed in the accounting records.
Accounts PayableAccounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
A a The trial balance will still balance in spite of this error as there is an equal debit and credit for 8700 even though the credit to the Accounts ...View the full answer
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
