ACC120 Study Guide - Final Guide: Deferral, Accounts Payable, Accounts Receivable

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greenmuskrat329

21 Jan 2019

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Document Summary

Incorrect: incorrect, correct, incorrect, incorrect, incorrect, incorrect, incorrect, incorrect, incorrect (b) Taking it further: this error understates accounts receivable and accounts. It may lead to liabilities being unpaid and receivables being uncollected: this error may lead to salaries to employees not being paid since the transaction was posted as a credit to cash. The error would also understate the company"s liabilities: this error overstates salaries expense. It results in lower profits on the income statement because of the additional expense: this error shows lower liabilities by understating unearned. It results in higher profit on the income statement because of the overstated service revenue: this error understates the asset accounts receivable and understates service revenue. It results in a lower profit on the income statement because of the unrecorded revenue. Cash (,875 + +) $ 6,615. Accounts receivable (,620 ) 2,850. Equipment (,020 + ,000) 15,370.

Related Questions

The Colby Group has the following unadjusted trial balance as of August 31, 2019.

Collby Group
Unadjusted Trial Balance
August 31, 2019
Accounts Title	Debit	Credit
Cash	$17,300
Accounts Receivable	$37,000
Supplies	$7,400
Prepaid Insurance	$1,900
Equipment	$196,000
Notes Payable		$97,600
Accounts Payable		$26,000
Terry Collby, Capital		$129,150
Terry Collby, Drawings	$56,000
Fee Earned		$454,450
Wages Expense	$270,000
Rent Expense	$51,800
Advertising Expense	$25,200
Miscellaneous Expense	$5,100
Total	$667,700	$707,200

The debit and credit totals are not equal as a result of the following errors:

a. The cash entered on the trial balance was understated by $6,000.

b. A cash receipt of $5,600 was posted as a debit to Cash of $6,500.

c. A debit of $11,000 to Accounts Receivable was not posted.

d. A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.

e. An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.

f. The balance of Notes Payable was understated by $20,000.

g. A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.

h. A debit of $7,000 for withdrawal by the owner was posted as a credit to Terry Colby, Capital.

i. The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.

j. Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.

Required:

1. Prepare a corrected unadjusted trial balance as of August 31, 2019.

2. Does the fact that the unadjusted trial balance in (1) is balanced means that there are no errors in the accounts?

blushraccoon169

For each item described: Identify the type of account (Asset,Liability, Equity, Revenue or Gain, Expense or Loss), normalbalance (Debit, Credit), financial statement (Balance Sheet, IncomeStatement), and whether the account is closed at the end of theperiod (Yes, No) by selecting the letter that best describes thoseattributes. If an account is a contra account, the answer will showthe account type in parentheses. Answer items may beused once, more than once, or not at all.

-	Sales & Services
-	Allowance to for Doubtful Accounts
-	Office Salaries Paid
-	Notes Payable
-	Cash
	Sales Returns & Allowances

1.	Expense or Loss, Debit, Income Statement, Yes
2.	Revenue or Gain, Credit, Income Statement, Yes
3.	Asset, Debit, Income Statement, Yes
4.	Liability, Credit, Income Statement, Yes
5.	Revenue, Credit, Balance Sheet, No
6.	(Asset), Credit, Balance Sheet, No
7.	(Revenue or Gain), Credit, Income Statement, Yes
8.	Asset, Debit, Balance Sheet, No
9.	Asset, Debit, Balance Sheet, No