Question

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

a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct
b. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.
c. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-
d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.
e. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.


Required:
a. For each of these​ errors, state whether total debits equal total credits on the trial balance.
b. Identify each account that has an incorrect balance and the amount and direction of the error.

Answer 1

a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct

• Liabilities (credit balance) are understated by $5,000 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITS

b. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.

• Expenses (debit balance) are understated by $10,900 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITS

c. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-

• Assets (debit balance) are understated by $600 and liabilities (credit balance) are overstated by $600. ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITS

d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.

• Assets (debit balance) are understated by $450 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITS

e. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.

• both assets (debit balance) and liabilities (credit balance) are understated by $90. ⇒ TOTAL DEBITS EQUAL TOTAL CREDITS