Cash paid on accounts payable for $930 was recorded as a debit to Accounts Payable $390 and a credit to Cash $390. 2. The purchase of supplies on account for $500 was debited to Equipment $500 and credited to Accounts Payable $500. 3. The company paid

Don Scott, CPA, was asked by Mike Rice to review the accounting records and prepare the financial statements for his upholstering shop.  Don reviewed the records and found three errors.

1.   Cash paid on accounts payable for $930 was recorded as a debit to Accounts Payable $390 and a credit to Cash $390.

2.   The purchase of supplies on account for $500 was debited to Equipment $500 and credited to Accounts Payable $500.

3.   The company paid $1,500 in cash dividends and the bookkeeper debited Accounts Receivable for $150 and credited Cash $150.

Instructions

Prepare an analysis of each error showing the

(a)   incorrect entry.

(b)   correct entry.

(c)   correcting entry.

    • Posted: 5 years ago
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