On March 1, it was discovered that the following errors took place in journalizing and posting transactions: a. The receipt of $8,400 for services rendered was recorded as a debit to Accounts Receivable and a credit to Fees Earned. b. The purchase of supplies of $2,500 on account was recorded as a debit to Office Equipment and a credit to Supplies. Journalize the entries on March 1 to correct the errors. Use two entries to correct the error described in (b). (That is, record an entry to reverse the incorrect entry and a second entry to record the correct entry.) Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Office Equipment 17 Automobiles LIABILITIES 21 Accounts Payable 22 Unearned Rent 23 Notes Payable 24 Salaries Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends REVENUE 41 Fees Earned 42 Sales Commission EXPENSES 51 Advertising Expense 52 Automobile Expense 53 Insurance Expense 54 Rent Expense 55 Salary Expense 56 Supplies Expense 57 Utilities Expense 58 Miscellaneous Expense

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

On March 1, it was discovered that the following errors took place in journalizing and posting transactions:

a.	The receipt of $8,400 for services rendered was recorded as a debit to Accounts Receivable and a credit to Fees Earned.
b.	The purchase of supplies of $2,500 on account was recorded as a debit to Office Equipment and a credit to Supplies.

Journalize the entries on March 1 to correct the errors. Use two entries to correct the error described in (b). (That is, record an entry to reverse the incorrect entry and a second entry to record the correct entry.) Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Insurance
15	Land
16	Office Equipment
17	Automobiles

	LIABILITIES
21	Accounts Payable
22	Unearned Rent
23	Notes Payable
24	Salaries Payable

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends

	REVENUE
41	Fees Earned
42	Sales Commission

	EXPENSES
51	Advertising Expense
52	Automobile Expense
53	Insurance Expense
54	Rent Expense
55	Salary Expense
56	Supplies Expense
57	Utilities Expense
58	Miscellaneous Expense

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