Chapter 2, Problem 20E

Identifying effects of posting errors on the trial balance

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.

	Description of Posting Error	(1) Difference between Debit and Credit Columns	(2) Column with the Larger Total	(3) Identify Accounts) Incorrectly Stated	(4) Amount That Account(s) Is Over-or Understated
a.	$3,600 debit to Rent Expense is posted as a $1,340 debit.	$2,260	Credit	Rent Expense	Rent Expense understated $2,260
b.	$6,500 credit to Cash is posted twice as two credits to Cash.
c.	$10,900 debit to the Dividends account is debited to Common Stock.
d.	$2,050 debit to Prepaid Insurance is posted as a debit to Insurance Expense.
e.	$38,000 debit to Machinery is posted as a debit to Accounts Payable.
f.	$5,850 credit to Services Revenue is posted as a $585 credit.
g.	$1,390 debit to Store Supplies is not posted.