During March, Salma Ahmad, the owner of Doan Cleaning Services, had trouble keeping her debits and credits
Question:
During March, Salma Ahmad, the owner of Doan Cleaning Services, had trouble keeping her debits and credits equal. The following errors were noted:
a. Ahmad did not post the entry to record $3,500 of services performed on account.
b. In posting a $300 payment on account, debited Cash and credited Accounts Payable.
c. In posting a cash payment, correctly debited Accounts Payable for $425 but incorrectly credited Cash for $245.
d. In posting a cash receipt of $750, debited Cash but forgot to post the credit to Accounts Receivable.
e. In posting the purchase of $1,000 of equipment on credit, debited Accounts Payable and credited Equipment.
Required
For each of the errors described, indicate:
1. Whether debits equal credits on the trial balance,
2. Which account(s) have incorrect balances.
Accounts 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...
Step by Step Answer:
Fundamental Accounting Principles Volume 1
ISBN: 9781259259807
15th Canadian Edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann