A trial balance does not balance. In looking for the error, you notice that Accounts Payable has

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A trial balance does not balance. In looking for the error, you notice that Accounts Payable has a credit balance of \(\$ 6,000\). However, you discover that a transaction for the credit purchase of a computer for \(\$ 525\) had been recorded with a \(\$ 525\) debit to Office Equipment and a \(\$ 525\) debit to Accounts Payable. Answer each of the following questions, giving the dollar amount of the misstatement, if any.

a. Was the balance of the Office Equipment account overstated, understated, or correctly stated in the trial balance?

b. Was the balance of the Accounts Payable account overstated, understated, or correctly stated in the trial balance?

c. Was the debit column total of the trial balance overstated, understated, or correctly stated?

d. Was the credit column total of the trial balance overstated, understated, or correctly stated?

\(e\). If the credit column total of the trial balance was \(\$ 144,000\) before the error was corrected, what was the total of the debit column?

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Financial Accounting

ISBN: 9780256091939

5th Edition

Authors: Kermit D. Larson, Paul B. W. Miller

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