Question

Effect of Errors on Trial Balance

The following errors occurred in posting from a two-column journal:

1. A credit of $4,460 to Accounts Payable was not posted.
2. An entry debiting Accounts Receivable and crediting Fees Earned for $10,200 was not posted.
3. A debit of $730 to Accounts Payable was posted as a credit.
4. A debit of $1,390 to Supplies was posted twice.
5. A debit of $1,590 to Cash was posted to Miscellaneous Expense.
6. A credit of $160 to Cash was posted as $610.
7. A debit of $4,720 to Wages Expense was posted as $4,270.

Considering each case individually (i.e., assuming that no other errors had occurred):

(a) Indicate by "yes" or "no" whether the trial balance would be out of balance.

(b) If the answer to (a) is "yes", indicate the amount by which the trial balance totals would differ.

(c) Indicate whether the debit or credit column of the trial balance would have the larger total.

If "no", enter "0" in the difference column and select "neither" from the drop box under "Larger Total". Enter all amounts as positive numbers. Answers should be presented in the following form, with error (1) given as an example:

Answer 1

S. No.	Situation	Explanation on Error	Whether the Trial Balance would be Out of Balance	Amount of Difference	Column Having Larger Total
1	1. A credit of $4,460 to Accounts Payable was not posted.	Here, Account Payale or Creditor is not recorded. Hence Account Payable was understated, Need to be correctly valued at 4460.	Yes, Out of Balance	4460	Debit Column ( Larger Total by 4460 Value)
2	2. An entry debiting Accounts Receivable and crediting Fees Earned for $10,200 was not posted.	Here, A complete transaction is not recorded in books of Accounts. i.e Sale of Service. Such Transaction is not able to detect as it keeps trial balance matched i.e Balanced.	No, Out of Balance	0	Neither
3	3. A debit of $730 to Accounts Payable was posted as a credit.	Here, It will Overstate the Accounts Payable i.e Credit Side. The difference will come by 730 X 2 = 1460 because Account Payable to be debited but we credited it means we wrongly credited as well as not posted correct entry thus in order to correct wrongly posted entry we have to rectify the same as well as hit the correct entry in book also.	Yes, Out of Balance	1460	Credit Column ( Larger Total by 1460 Value )
4	4. A debit of $1,390 to Supplies was posted twice.	Here, Entry posted twice, will hit the trial balance, It will show the Debit balance Overstated.	Yes, Out of Balance	1390	Debit Column ( Larger Total by 1390 Value)
5	5. A debit of $1,590 to Cash was posted to Miscellaneous Expense.	Here, the Cash is shown at lower value and expenses is showing at higher value, but it will not hit the trial balance, because instead of posting to cash posted to Miscellaneous expenses. Hence Trial Balance will remain Balanced.	No, Out of Balance	0	Neither
6	6. A credit of $160 to Cash was posted as $610.	Here, difference of 450 in credit side will be reflected. It will casue the overstatement of Credit side of Trial Balance by 450. As 450 because we have to post 160, but we posted 610 i.e 610 -160 = 450 difference is overstated.	Yes, Out of Balance	450	Credit Column ( Larger Total by 450 Value )
7	7. A debit of $4,720 to Wages Expense was posted as $4,270.	Here, Differecne of 450 in debit side, keeps the debit side understated with 450 as because instaed of posting as 4720 posted as 4270 = 4720 -4270 = 450.	Yes, Out of Balance	450	Credit Column ( Larger Total by 450 Value )