Financial Accounting
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Given the following errors:
The bank recorded a deposit of $200 as $2,000.
The company's bookkeeper mistakenly recorded a deposit of $530 as $350.
The company's bookkeeper mistakenly recorded a payment of $250 received from a customer as $25 on the bank deposit slip. The bank caught the error and made the deposit for the correct amount.
The bank statement shows a check written by the company for $255 was erroneously paid (cleared the account) as $225.
The bookkeeper wrote a check for $369 but erroneously wrote down $396 as the cash disbursement on the company's records.
You are to complete the following task:
For each error, describe to a recently hired bookkeeper how it would be shown on a cash reconciliation.
Describe and analyze the effects of business transactions (both in terms of increases and decreases, and debits and credits) on the basic accounting elements: assets, liabilities, owners' equity, revenues, and expenses.
Identify and use the sources of accounting data and information.
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Hi there,
Here are your answers:
Question 1. The bank recorded a deposit of $200 as $2,000.
Answer: In this case, cash would be overstated by 1,800. Total assets and thus equity would be overstated by the 1,800.
The initial journal entry would have been:
DR: Cash 2000
CR: Equity 2000
The correcting journal entry would be:
CR: Equity 1800
DR: Cash 1800
Question 2. The company's bookkeeper ...
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