The Recording Process

The bookkeeper for J.L. Kang Equipment Repair made a number of errors in journalizing and posting, as described below.
  1. A credit posting of $525 to Accounts Receivable was omitted
  2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense
  3. A collection from a customer of $100 in payment of its account owed was journalizing and posted as a debit to Cash $100 and a credit to Service Revenue $100.
  4. A credit posting of $415 to Property Taxes Payable was made twice.
  5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a cr3edit to Cash $25.
  6. A debit of $625 to Advertising Expense was posted as $652.

Instructions

For each error:
  1. Indicate whether the trial balance will balance.
  2. If the trial balance will not balance, indicate the amount of the difference.
  3. Indicate the trial balance column that will have the larger total.

Consider each error separately. Use the following form, in which error (1) is given as an example.

(a)(b)(c)
Error
(1)
In Balance
No
Difference
$525
Larger Column
debit

Solution

J.L. Kang Equipment Repair
Analysis of Errors
(a)(b)(c)
Error
(1)
In Balance
No
Difference
$525
Larger Column
debit
(2)Yes--
(3)Yes--
(4)No$415Credit
(5)Yes--
(6)No$27Credit
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