Posting errors are identified in the following table. In column (1), enter the amount of the difference between the two trial balance columns (debit and credit) due to the error. In column (2), identify the trial balance column (debit or credit) with the larger amount if they are not equal. In column (3), identify the account(s) affected by the error. In column (4), indicate the amount by which the account(s) in column (3) is under- or overstated. Item (a) is completed as an example. (Select "None" if there is no effect.)
Posting errors are identified in the following table. In column (1), enter the amount of the difference between the two trial balance columns (debit and credit) due to the error. In column (2), identify the trial balance column (debit or credit) with the larger amount if they are not equal. In column (3), identify the account(s) affected by the error. In column (4), indicate the amount by which the account(s) in column (3) is under- or overstated. Item (a) is completed as an example. (Select "None" if there is no effect.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Posting errors are identified in the following table. In column (1), enter the amount of the difference between the two
Transcribed Image Text:**Analysis of Posting Errors in Financial Records**
The table below outlines various posting errors in financial records, highlighting differences between debits and credits, incorrectly stated accounts, and the impact on account balances:
| Description of Posting Error | (1) Difference between Debit and Credit Columns | (2) Column with the Larger Total | (3) Identify Account(s) Incorrectly Stated | (4) Amount That Account(s) Over- or Understated |
|---------------------------------------------------------------------------------------------------------------|--------------------------------------------------|-----------------------------------|--------------------------------------------|------------------------------------------------------------------------|
| a. $2,760 debit to Rent Expense is posted as a $2,670 debit. | $90 | Credit | Rent Expense | Rent Expense is understated by $90 |
| b. $5,520 credit to Cash is posted twice as two credits to Cash. | | | | |
| c. $11,040 debit to the Withdrawals account is debited to Owner’s Capital. | | | | |
| d. $2,610 debit to Prepaid Insurance is posted as a debit to Insurance Expense. | | | | |
| e. $48,300 debit to Machinery is posted as a debit to Accounts Payable. | | | | |
| f. $6,420 credit to Services Revenue is posted as a $642 credit. | | | | |
| g. $1,800 debit to Store Supplies is not posted. | | | | |
### Explanation of Errors:
1. **Error a:**
- **Description:** A $2,760 debit to Rent Expense was mistakenly posted as a $2,670 debit.
- **Difference:** $90
- **Column with Larger Total:** Credit
- **Incorrect Account:** Rent Expense
- **Impact:** Rent Expense is understated by $90.
2. **Error b:**
- **Description:** A $5,520 credit to Cash was posted twice.
- **Difference:** Not specified
- **Column with Larger Total:** Not specified
- **Incorrect Account:** Not specified
- **Impact:** Not specified
3. **Error c:**
- **Description:** A $11,040 debit intended for the Withdrawals account was incorrectly posted to Owner’s Capital.
- **Difference
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