Karlsen Company, ASA discovered the following errors made in January 2017. 1. A payment of Salaries and

Question:

Karlsen Company, ASA discovered the following errors made in January 2017.

1. A payment of Salaries and Wages Expense of €700 was debited to Equipment and credited to Cash, both for €700.

2. A collection of €800 from a client on account was debited to Cash €300 and credited to Service Revenue €300.

3. The purchase of equipment on account for €760 was debited to Equipment €670 and credited to Accounts Payable €670.

Instructions

(a) Correct the errors by reversing the incorrect entry and preparing the correct entry.

(b) Correct the errors without reversing the incorrect entry.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...