Tiombe Jozeb owns and operates her own company Jozeb Enterprise. The new accountant discovered the following...
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Tiombe Jozeb owns and operates her own company Jozeb Enterprise. The new accountant discovered the following errors at the end of January its first month of operation: 1. Tiombe's personal rent cheque of $1,000 was debited to Rent Expense and credited to cash. 2. Cash payment from a customer for $750 was debited to Accounts Receivable and credited to cash as $570. 3. An accrual of interest income of $600 was recorded as a credit to interest payable and a debit to interest receivable. 4. The purchase of six month of office supply $1,800 was recorded as a debit to Supply Expense and credited to Accounts Payable. 5. Payments to accounts payable of $500 was recorded as a debit to cash and a credit to accounts payable. 6. A prepayment of $450 for services to be rendered was debited to Service Revenue and credited to unearned revenue in the amount of $540. 7. Depreciation Expense of $800 for the period was not recorded. 8. A customer was billed for $400 of services rendered, Unearned Revenue was debited and Service revenue was credited. 9. A one-year insurance policy was purchase for $2,400 on January 1st. and was debited to Insurance Expense and credited to Cash. 10. Salaries payable of $1,000 at January 31st was no recorded. a) For each item, indicate the effect and the amount of the error Understatement (U), Overstatement (O) or No Effect (NE) on The Income statement and the Balance sheet component. Use the format below: Item # XX Income Statement Revenue O- $xxx Expense Profit NE O-$xx Asset O-$xx Balance Sheet Liability NE Owner's Equity O-$xx b) Correct each error by reversing the original error and record the correct entry. Tiombe Jozeb owns and operates her own company Jozeb Enterprise. The new accountant discovered the following errors at the end of January its first month of operation: 1. Tiombe's personal rent cheque of $1,000 was debited to Rent Expense and credited to cash. 2. Cash payment from a customer for $750 was debited to Accounts Receivable and credited to cash as $570. 3. An accrual of interest income of $600 was recorded as a credit to interest payable and a debit to interest receivable. 4. The purchase of six month of office supply $1,800 was recorded as a debit to Supply Expense and credited to Accounts Payable. 5. Payments to accounts payable of $500 was recorded as a debit to cash and a credit to accounts payable. 6. A prepayment of $450 for services to be rendered was debited to Service Revenue and credited to unearned revenue in the amount of $540. 7. Depreciation Expense of $800 for the period was not recorded. 8. A customer was billed for $400 of services rendered, Unearned Revenue was debited and Service revenue was credited. 9. A one-year insurance policy was purchase for $2,400 on January 1st. and was debited to Insurance Expense and credited to Cash. 10. Salaries payable of $1,000 at January 31st was no recorded. a) For each item, indicate the effect and the amount of the error Understatement (U), Overstatement (O) or No Effect (NE) on The Income statement and the Balance sheet component. Use the format below: Item # XX Income Statement Revenue O- $xxx Expense Profit NE O-$xx Asset O-$xx Balance Sheet Liability NE Owner's Equity O-$xx b) Correct each error by reversing the original error and record the correct entry.
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Answer rating: 100% (QA)
This task requires analyzing the accounting errors and identifying their effect on the financial statements of Tiombe Jozebs company We will go through each item and determine if there is an understat... View the full answer
Related Book For
South Western Federal Taxation 2017 Comprehensive
ISBN: 9781305874169
40th Edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young
Posted Date:
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