**Title: Accounting Error Correction Exercise****Marigold Company discovered the following errors made in January 2019:**1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310.2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790.3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.**Task:**Correct the errors by reversing the incorrect entry and preparing the correct entry. **Instructions:**- Credit account titles are automatically indented when the amount is entered. Do not indent manually.**Form:**| No. | Account Titles and Explanation | Debit | Credit ||-----|--------------------------------------|-------|--------|| 1. | | | || | (To reverse the incorrect entry) | | || | | | || | (To record the correct entry) | | || 2. | | | || | (To reverse the incorrect entry) | | || | | | || | (To record the correct entry) | | || 3. | | | || | (To reverse the incorrect entry) | | || | | | || | (To record the correct entry) | | |**Correct the errors without reversing the incorrect entry.**(Credit account titles are automatically indented when the amount is entered. Do not indent manually.)| No. | Account Titles and Explanation | Debit | Credit ||-----|--------------------------------------|-------|--------|| 1. | | | |---**Note:**This exercise allows students to apply their knowledge of accounting principles to identify and correct transaction errors. Each step involves reversing the incorrect entry and then recording the correct entry, ensuring that books correctly reflect the company's financial activities. **How to Correct Errors in Accounting Entries**When adjusting financial records, it is crucial to correct errors accurately without reversing the incorrect entry. Below is a guide and example of how to record the correct entry:---**(To record the correct entry)**Correct the errors without reversing the incorrect entry. *(Credit account titles are automatically indented when amount is entered.)*| No. | Account Titles and Explanation | Debit | Credit ||-----|---------------------------------------|-------|--------|| 1. | | | || | | | || 2. | | | || | | | || 3. | | | || | | | |---1. **Account Titles and Explanation**: State the specific accounts involved and explain the nature of the transaction.2. **Debit**: Enter the relevant amounts debited to the respective accounts.3. **Credit**: Enter the relevant amounts credited to the respective accounts.This template helps ensure the transparency and accuracy of financial records, maintaining the integrity of accounting data.Please ensure that credit account titles are automatically indented when an amount is entered, which is a standard practice for clearly differentiating debit and credit entries.For any further explanations or queries, please refer to your accounting guidelines or consult with a financial expert.

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Marigold Company discovered the following errors made in January 2019. 1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310. 2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790. 3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.

Marigold Company discovered the following errors made in January 2019. 1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310. 2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790. 3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.

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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**Title: Accounting Error Correction Exercise**

**Marigold Company discovered the following errors made in January 2019:**

1. A payment of Salaries and Wages Expense of $310 was debited to Equipment and credited to Cash, both for $310.
2. A collection of $7,900 from a client on account was debited to Cash $790 and credited to Service Revenue $790.
3. The purchase of equipment on account for $800 was debited to Equipment $270 and credited to Accounts Payable $270.

**Task:**
Correct the errors by reversing the incorrect entry and preparing the correct entry.

**Instructions:**
- Credit account titles are automatically indented when the amount is entered. Do not indent manually.

**Form:**

| No. | Account Titles and Explanation | Debit | Credit |
|-----|--------------------------------------|-------|--------|
| 1. | | | |
| | (To reverse the incorrect entry) | | |
| | | | |
| | (To record the correct entry) | | |
| 2. | | | |
| | (To reverse the incorrect entry) | | |
| | | | |
| | (To record the correct entry) | | |
| 3. | | | |
| | (To reverse the incorrect entry) | | |
| | | | |
| | (To record the correct entry) | | |

**Correct the errors without reversing the incorrect entry.**

(Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

| No. | Account Titles and Explanation | Debit | Credit |
|-----|--------------------------------------|-------|--------|
| 1. | | | |

---

**Note:**
This exercise allows students to apply their knowledge of accounting principles to identify and correct transaction errors. Each step involves reversing the incorrect entry and then recording the correct entry, ensuring that books correctly reflect the company's financial activities.

**How to Correct Errors in Accounting Entries**

When adjusting financial records, it is crucial to correct errors accurately without reversing the incorrect entry. Below is a guide and example of how to record the correct entry:

---

**(To record the correct entry)**

Correct the errors without reversing the incorrect entry. *(Credit account titles are automatically indented when amount is entered.)*

| No. | Account Titles and Explanation | Debit | Credit |
|-----|---------------------------------------|-------|--------|
| 1. | | | |
| | | | |
| 2. | | | |
| | | | |
| 3. | | | |
| | | | |

---

1. **Account Titles and Explanation**: State the specific accounts involved and explain the nature of the transaction.
2. **Debit**: Enter the relevant amounts debited to the respective accounts.
3. **Credit**: Enter the relevant amounts credited to the respective accounts.

This template helps ensure the transparency and accuracy of financial records, maintaining the integrity of accounting data.

Please ensure that credit account titles are automatically indented when an amount is entered, which is a standard practice for clearly differentiating debit and credit entries.

For any further explanations or queries, please refer to your accounting guidelines or consult with a financial expert.

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