Explore BrainMass

Explore BrainMass

    Financial Accounting in the Correction of Journal Errors

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Correcting Entries:
    The following errors were made in journalizing and posting transactions in May in the Unruh Company.

    1. An $800 payment for repairs incurred on account and properly recorded in April was debited to Repair Expense $800 and credited to Cash $800.

    2. A collection of $2,000 on account from a customer was recorded as a debit to Cash $200 and a credit to Accounts Receivable $200.

    3. A bill for $650 for new office equipment was debited to Office Supplies $560 and credited to Accounts Payable $560.

    4. The receipt of $600 from a customer for future service was recorded as a debit to Accounts Receivable $600 and a credit to Service Revenue $600.

    Instructions
    Prepare the correcting entries at May 31 assuming the incorrect entry is not reversed. (Omit explanations.)

    © BrainMass Inc. brainmass.com March 4, 2021, 5:49 pm ad1c9bdddf
    https://brainmass.com/business/business-math/financial-accounting-correction-journal-errors-12715

    Solution Preview

    Hi there,
    <br>
    <br>1. Note, if this payment was made on account, then no cash would have left the premises. The correct entry would have been:
    <br>DR: Repairs expense $800
    <br>CR: Accounts Payable $800
    <br>
    <br>But first, one needs to reverse the entry ...

    Solution Summary

    This question involves the fundamentals of accounting

    $2.49

    ADVERTISEMENT