Home Team Corporation recently hired Bilal as its bookkeeper. Mr. Bilal is somewhat inexperienced and has made numerous errors recording daily business transactions. Indicate the effects of the errors described below on each of the financial statement elements shown in the column headings. Use the following symbols: O for overstated; U for understated, and NE for no effect. Make a 3 Colum table and name as Error Transaction, Correct Debit Account and Correct Credit Account. Prepare General Entries with Correct Accounts. NetTotalTotalOwners'ErrorIncome Assets Liabilities EquityRecorded the issuance of capital stock bydebiting Capital Stock and crediting ServiceRevenue.Recorded the declaration and payment ofa dividend by debiting Capital Stock andcrediting Cash.Recorded the payment of an account payableby debiting Cash and crediting Rent Expense.Recorded the collection of an outstandingaccount receivable by debiting Cash andcrediting Service Revenue.Recorded client billings on account bydebiting Accounts Receivable and creditingAdvertising Expense.Recorded the cash purchase of land bydebiting Supplies Expense and creditingNotes Payable.Recorded the purchase of a building onaccount by debiting Cash and creditingDividends Payable.

An error is a mistake committed in the process of bookkeeping or in accounting. In some cases errors…

Answered: Home Team Corporation recently hired…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Home Team Corporation recently hired Bilal as its bookkeeper. Mr. Bilal is somewhat inexperienced and has made numerous errors recording daily business transactions. Indicate the effects of the errors described below on each of the financial statement elements shown in the column headings. Use the following symbols: O for overstated; U for understated, and NE for no effect. Make a 3 Colum table and name as Error Transaction, Correct Debit Account and Correct Credit Account. Prepare General Entries with Correct Accounts.

Net
Total
Total
Owners'
Error
Income Assets Liabilities Equity
Recorded the issuance of capital stock by
debiting Capital Stock and crediting Service
Revenue.
Recorded the declaration and payment of
a dividend by debiting Capital Stock and
crediting Cash.
Recorded the payment of an account payable
by debiting Cash and crediting Rent Expense.
Recorded the collection of an outstanding
account receivable by debiting Cash and
crediting Service Revenue.
Recorded client billings on account by
debiting Accounts Receivable and crediting
Advertising Expense.
Recorded the cash purchase of land by
debiting Supplies Expense and crediting
Notes Payable.
Recorded the purchase of a building on
account by debiting Cash and crediting
Dividends Payable.

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