Blooms Taxonomy: Analyze Analytic AACSB: Communication AICPA BB: Critical Thinking AICPA BB: Industry AICPA FN: Measurement AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 02-A2 Topic: Account Balance Topic: Debt Ratio 192. At year-end, Harris Cleaning Service noted the following errors in its trial balance: 1. It understated the total debits to the Cash account by $500 when computing the account balance. 2. A credit sale for $311 was recorded as a credit to the revenue account, but the offsetting debit was not posted. 3. A cash payment to a creditor for $2,600 was never recorded. 4. The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial balance. 5. A $24,900 truck purchase for cash was recorded as a $24,090 debit to Vehicles and a $24,090 credit to Notes Payable. 6. A purchase of office supplies for $150 was recorded as a debit to Office Equipment. The offsetting credit entry was correct. 7. An additional investment of $4,000 by Del Harris was recorded as a debit to Common Stock and as a credit to Cash. 8. The cash payment of the $510 utility bill for December was recorded (but not paid) twice. 9. A revenue account balance of $79,817 was listed on the trial balance as $97,817. 10. A $1,000 cash dividend was recorded as a $100 debit to Dividends and $100 credit to cash. Using the form below, indicate whether each error would cause the trial balance to be out of balance, the amount of any imbalance and whether a correcting journal entry is required. Would the error cause the trial Correcting Journal balance to be out of balance? Required Error Yes No Amount of Yes No Imbalance 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Blooms Taxonomy: Analyze Analytic AACSB: Communication AICPA BB: Critical Thinking AICPA BB: Industry AICPA FN: Measurement AICPA FN: Reporting Difficulty: 2 Medium Learning Objective: 02-A2 Topic: Account Balance Topic: Debt Ratio 192. At year-end, Harris Cleaning Service noted the following errors in its trial balance: 1. It understated the total debits to the Cash account by $500 when computing the account balance. 2. A credit sale for $311 was recorded as a credit to the revenue account, but the offsetting debit was not posted. 3. A cash payment to a creditor for $2,600 was never recorded. 4. The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial balance. 5. A $24,900 truck purchase for cash was recorded as a $24,090 debit to Vehicles and a $24,090 credit to Notes Payable. 6. A purchase of office supplies for $150 was recorded as a debit to Office Equipment. The offsetting credit entry was correct. 7. An additional investment of $4,000 by Del Harris was recorded as a debit to Common Stock and as a credit to Cash. 8. The cash payment of the $510 utility bill for December was recorded (but not paid) twice. 9. A revenue account balance of $79,817 was listed on the trial balance as $97,817. 10. A $1,000 cash dividend was recorded as a $100 debit to Dividends and $100 credit to cash. Using the form below, indicate whether each error would cause the trial balance to be out of balance, the amount of any imbalance and whether a correcting journal entry is required. Would the error cause the trial balance to be out of balance? Correcting Journal Required Error Yes No Amount of Imbalance Yes No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.