I don\'t understand why oin Chapter 2 Analyzing and Recording Transactions You a
ID: 2575678 • Letter: I
Question
I don't understand why oin Chapter 2 Analyzing and Recording Transactions You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error. Specifically, a correct ouralized c es i purchase of a computer for $16.950 is posted from the journal to the ledger with a $16,950 debit to Office Equipment and another $16.950 debit to Accounts Payable. The Office Equipment account has a debit balance of $40,100 on the trial balance. Answer each of the following questions and compute the dollar amount of any misstatement kercise 2-21 Analyzing a trial balance error A1 P2 2 a. Is the debit column total of the trial balance overstated, understated, or correctly stated?o b. Is the credit column total of the trial balance overstated, understated, or correctly stated? c. Is the Office Equipment account balance overstated, understated, or correctly stated in the trial balance? balance? of the credit column before correction? d. Is the Accounts Payable account balance overstated, understated. or correctly stated in the trial e. If the debit column total of the trial balance is $360,000 before correcting the error, what is the total 80000-337802010Explanation / Answer
a. the debit side of the trial balance is correct as there is no error for the posting done to office equipment (which has a debit balance) account. [see, some accounts have debit balances(all the assets a/c's) and some have credit(the liablity accounts), accounts payable being a liablity account has credit balance and so here the wrong debit to accounts payable has effected only the credit side.]
b.the credit column is understated by $33,900.
(i) $16950 for not crediting to accounts payable.
(ii) $16950 for rectifying the wrong debit to accounts payable.
c. the office equipment account is correctly stated as the entry was correctly posted to this account.
d. the accounts payable account is understated by $33900.(reason same as (b).
e. the credit column would stand at $33,900 less in comparison to the debit column.
credit column total = $(360,000 - 33,900) = $326,100
[for any other doubts please comment and ask specifically]
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