Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 2, Problem 3DQ
(a)
To determine
Discuss the cause of the unusual balance of the cash account with a credit balance of $1,850, assuming that no errors have occurred during journalizing, and posting.
(b)
To determine
Identify whether the credit balance of $1,850 in the cash account is an asset, a liability, owner’s equity, revenue, or an expense.
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Students have asked these similar questions
McIntyre Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account asof December 31 has a credit balance of $1,850, and there is no undeposited cash on hand.(a) Assuming that no errors occurred during journalizingor posting, what caused this unusual balance?(b) Is the $1,850 credit balance in the cashaccount an asset, a liability, owner’s equity, a revenue,or an expense?
Frank Kane company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The accounts as of July 31 has a credit balance of K225 and there is no undeposited cash on hand.
a) Assuming that there were no errors in journalizing or posting, what is the explanation of this unusual balance?
b) Is the K225 credit balance in the cash account an asset, a liability, capital, a revenue or an expense?
Requirement 1:
ABC Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of December 31 has a credit balance of $1,850, and there is no undeposited cash on hand. (a) Assuming that no errors occurred during journalizing or posting, what caused this unusual balance? (b) Is the $1,850 credit balance in the cash account an asset, a liability, owner's equity, a revenue, or an expense?
Requirement 2:
Assume that DEF Company erroneously recorded the payment of $7,500 of owner withdrawals as a debit to Salary Expense. (a) How would this error affect the equality of the trial balance? (b) How would this error affect the income statement, statement of owner's equity, and balance sheet?
Chapter 2 Solutions
Financial Accounting
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