Question

Beth Rothman has trouble keeping her debits and credits equal. During a recent month, Beth made the following accounting errors:

a. In preparing the trial balance, Beth omitted a $4,000 Notes Receivable. The credit to Cash was correct.

b. Beth posted a $90 Utilities Expense as $900. The credit to Cash was correct.

c. In recording a $400 payment on account, Beth debited Equipment instead of Accounts Payable.

d. In journalizing a receipt of cash for service revenue, Beth debited Cash for $800 instead of the correct amount of $80. The credit was correct.

e. Beth recorded a $130 purchase of office supplies on account by debiting Office Supplies and crediting Accounts Payable for $310.

Requirements:

1. For each of these errors, state whether total debits equal total credits on the trial balance.

2. Identify each account that has an incorrect balance, and the amount and direction of the error (such as Accounts Receivable $500 too high ).

Answer 1

Beth Rothman made several accounting errors affecting the trial balance and specific account balances with either an overstatement or understatement of the accounts involved.

Step-by-step explanation:

When analyzing the errors made by Beth Rothman, we need to consider the impact each has on the trial balance and the specific accounts that are affected:

• a. Omitting the $4,000 Notes Receivable would mean debits are $4,000 less than credits.
• b. Posting a $90 Utilities Expense as $900 means debits are $810 more than credits.
• c. Debiting Equipment instead of Accounts Payable for $400 means Equipment is overstated by $400 while Accounts Payable is understated by the same amount.
• d. Debiting Cash for $800 instead of $80 results in debits being $720 more than credits.
• e. Debiting Office Supplies and crediting Accounts Payable for $310 instead of $130 means both accounts are incorrect by $180, with Office Supplies being too high and Accounts Payable being too low.

Accounts and amounts with incorrect balances:

• Notes Receivable: $4,000 too low
• Utilities Expense: $810 too high
• Equipment: $400 too high
• Accounts Payable: $400 too low (due to error c) and $180 too low (due to error e)
• Cash: $720 too high
• Office Supplies: $180 too high