In: Accounting
Which of the following errors, each considered individually, would cause the trial balance totals to be unequal? a.Cash received from customers on account was posted as a debit of $720 to Cash and a credit of $720 to Accounts Payable. b.A payment of $4,450 to a creditor was posted as a debit of $4,500 to Accounts Payable and a credit of $450 to Cash. c.A payment of $67 for insurance was posted as a debit of $76 to Prepaid Insurance and a credit of $76 to Cash. d.A transaction was not posted.
Solution: | ||||
Corrected Journal Entry for the transaction are as below, | ||||
Journal Entries | ||||
Transaction | Account Title and explanation | Debit | Credit | |
A | Cash | $ 720 | ||
Account Receivable | $ 720 | |||
B | Account Payable | $ 4,450 | ||
Cash | $ 4,450 | |||
C | Prepaid Insurance | $ 67 | ||
Cash | $ 67 | |||
As per above journal entry, in given problem Entry for Option A is posted wrong because we received the cash from account | ||||
receivable so we have to reduce the same but in option account payalbe in increased so option A is have the errors | ||||
Answer = | ||||
Option A = Cash received from customers on account was posted as a debit of $720 to Cash and a credit of $720 to Accounts Payable | ||||