Cookie Mejias, owner of Mejias Company, asked her bookkeeper how each of the following situations will affect the totals of the trial balance and individual ledger accounts.
◆ An $850 payment for a desk was recorded as a debit to Office Equipment, $85, and a credit to Cash, $85.
◆ A payment of $300 to a creditor was recorded as a debit to Accounts Payable, $300, and a credit to Cash, $100.
◆ An Accounts Receivable collection of $400 was recorded as a debit to Cash, $400, and a credit to C. Mejias, Capital, $400.
◆ The payment of a liability of $400 was recorded as a debit to Accounts Payable, $40, and a credit to Supplies, $40.
◆ A purchase of equipment for $800 was recorded as a debit to Supplies, $800, and a credit to Cash, $800.
◆ A payment of $95 to a creditor was recorded as a debit to Accounts Payable, $95, and a credit to Cash, $59.
What did the bookkeeper tell Cookie? Which accounts were overstated and which were understated? Which were correct? Explain in writing how mistakes can be avoided in the future.