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Determining the Amount of Out-of-Balance Trial Balances

The bookkeeper for Pear Corporation made a number of errors in journalizing and posting, as described below.

1. A credit posting of $500 to Accounts Receivable was omitted.
2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense.
3. A collection from a customer of $100 in payment of its account owed was journalized and posted as a debit to Cash $100 and a credit to Service Revenue $100.
4. A credit posting of $350 to Property Taxes Payable was made twice.
5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25.
6. A debit of $695 to Advertising Expense was posted as $659

Instructions
For each error:
(a) Indicate whether the trial balance will balance.
(b) If the trial balance will not balance, indicate the amount of the difference.
(c) Indicate the trial balance column that will have the larger total.

Consider each error separately. Use the following form, in which error (1) is given as an example.

(a) (b) (c)
Error In Balance Difference Larger Column
(1) No $500 debit.

Solution Preview

Please see the attached Word 97-2003 document.The bookkeeper for Pear Corporation made a number of errors in journalizing and posting, as described below.

1. A credit posting of $500 to Accounts Receivable was omitted.
2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense.
3. ...

Solution Summary

This solution illustrates the effects of various journalizing and posting errors on the trial balance.

$2.19