The following errors occurred in the accounting records of Wilburton Electronics, Inc.: a. The company accountant recorded

Question:

The following errors occurred in the accounting records of Wilburton Electronics, Inc.:

a. The company accountant recorded the receipt of cash for service revenue by debiting Cash for $1,640 instead of the correct amount of $1,460. Service Revenue was also credited for $1,640, the incorrect amount.

b. A $185 purchase of supplies on account was recorded by debiting Accounts Payable and crediting Supplies.

c. The company accountant recorded a $1,350 payment of rent by debiting Rent Expense for $135 and crediting Cash for $135.

d. In recording a $1,750 receipt on account, Cash was debited and Accounts Payable was credited.

Requirements

1. Prepare the necessary journal entries to correct each of these errors.

2. For each of the errors, determine if the error would cause net income to be overstated, understated, or unchanged?

Accounts Payable
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...