Reference no: EM132473826

Question 1: Study the error situations listed below and indicate whether they would or would not cause the trial balance to be out of balance. If you decide that the trial balance would be out of balance, state by how much.

• Trial Balance will not be out of balance (show with a checkmark)
• Trial Balance will be out of balance by amount shown below

A. A payment for equipment was recorded as a debit of $395 to Equipment and a credit of $359 to Bank.

B. Cash received from a customer was recorded as a debit of $180 to Bank and a credit of $180 to Accounts Payable.

C. A credit of $300 to the Capital account was recorded twice.

D. An account balance of $140 was transferred to the wrong side of the trial balance.

E. A payment of $495 to a creditor was recorded as a debit to Accounts Payable of $495 and a credit to Bank of $49.

F. An amount of $50 was debited to Supplies, but it should have been debited to Equipment.

The trial balance prepared by your company at the end of the month did not balance. In reviewing the entries for the month, the accountant noticed that one of the transactions was recorded as a debit to Office Equipment of $900 and a debit to Accounts Payable of $900. The purchase was made on credit. Answer the following questions and explain your answer for each.

Question A. Was the Accounts Payable account overstated, understated, or correctly stated on the trial balance? If overstated or understated, show by how much.

Question B. Was the total of the debit column of the trial balance overstated, understated, or correctly stated? If overstated or understated, show by how much.

Question C. Was the Office Equipment account overstated, understated, or correctly stated? If overstated or understated, show by how much.

Question D. Was the credit column total of the trial balance overstated, understated, or correctly stated? If overstated or understated, show by how much.