on ance P2-6C. Cookie Mejias, owner of Mejias Company, would like to know how each of the following situations would affect the totals of the trial balance and individual ledger accounts: 1. An $850 payment for a desk was recorded as a debit to Office Equipment, $85, and a credit to Cash, $85. 2. A payment of $300 to a creditor was recorded as a debit to Accounts Payable, $300, and a credit to Cash, $100. 3. An Accounts Receivable collection of $400 was recorded as a debit to Cash, $400, and a credit to C. Mejias, Capital, $400. 4. The payment of a liability of $400 was recorded as a debit to Accounts Payable, $40, and a credit to Supplies, $40. 5. A purchase of equipment for $800 was recorded as a debit to Supplies, $800, and a credit to Cash, $800. 6. A payment of $95 to a creditor was recorded as a debit to Accounts Payable, $95, and a credit to Cash, $59. What would you tell Cookie? Which accounts would be overstated and which would be understated? Which would be correct? Explain in writing how mistakes like these can be avoided.

on ance P2-6C. Cookie Mejias, owner of Mejias Company, would like to know how each of the following situations would affect the totals of the trial balance and individual ledger accounts: 1. An $850 payment for a desk was recorded as a debit to Office Equipment, $85, and a credit to Cash, $85. 2. A payment of $300 to a creditor was recorded as a debit to Accounts Payable, $300, and a credit to Cash, $100. 3. An Accounts Receivable collection of $400 was recorded as a debit to Cash, $400, and a credit to C. Mejias, Capital, $400. 4. The payment of a liability of $400 was recorded as a debit to Accounts Payable, $40, and a credit to Supplies, $40. 5. A purchase of equipment for $800 was recorded as a debit to Supplies, $800, and a credit to Cash, $800. 6. A payment of $95 to a creditor was recorded as a debit to Accounts Payable, $95, and a credit to Cash, $59. What would you tell Cookie? Which accounts would be overstated and which would be understated? Which would be correct? Explain in writing how mistakes like these can be avoided.

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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P2-6C. Cookie Mejias, owner of Mejias Company, would like to know how each of the following situations would affect the totals of the trial balance and individual ledger accounts: 1. An $850 payment for a desk was recorded as a debit to Office Equipment, $85, and a credit to Cash, $85. 2. A payment of $300 to a creditor was recorded as a debit to Accounts Payable, $300, and a credit to Cash, $100. 3. An Accounts Receivable collection of $400 was recorded as a debit to Cash, $400, and a credit to C. Mejias, Capital, $400. 4. The payment of a liability of $400 was recorded as a debit to Accounts Payable, $40, and a credit to Supplies, $40. 5. A purchase of equipment for $800 was recorded as a debit to Supplies, $800, and a credit to Cash, $800. Situation 1. 2. 3. 4. 5. 6. 6. A payment of $95 to a creditor was recorded as a debit to Accounts Payable, $95, and a credit to Cash, $59. What would you tell Cookie? Which accounts would be overstated and which would be understated? Which would…
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