Question

A journal entry for a $ 290 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $ 520 and a credit to Cash for $ 290. Which of the following statements correctly states the effect of the error on the trial​ balance?

A) The sum of the credits will exceed the sum of the debits by $230.B) The sum of the debits will exceed the sum of the credits by $520.C) The sum of the debits will exceed the sum of the credits by $230.D) The sum of the debits will exceed the sum of the credits by $520.

Answer 1

.C) The sum of the debits will exceed the sum of the credits by $230

Step-by-step explanation:

Double Entry Accounting require that a debit entry must have an equal credit entry to make the entry / Trail balance balanced.

The entry that should be recorded.

Dr. Office Supplies $290

Cr. Cash $290

The entry that have been recorded.

Dr. Office Supplies $520

Cr. Cash $290

The office supplies account is overstated by $230 ( $520-$290). This is an debit nature account and the so, the debit side is exceeded by $230.