This exercise will test your ability to identify the effects of errors that commonly occur in the process of recording and posting transactions. As you will see, some errors cause the accounts to be out of balance, thus quickly identifying the existence of an error. However, some errors do not cause an imbalance in the accounts and are more difficult to discover.

An inexperienced bookkeeper for Nip-N-Tuck Alteration Shop made the following errors in journalizing and posting the transactions that occurred during February 2014.

  1. The credit portion of a journal entry to record a $500 loan payment was posted to the ledger twice.
  2. A fictitious transaction was recorded in the journal for the amount of $300.
  3. A cash payment of $700 for rent was recorded in the journal by a debit of $700 to Rent Expense and a credit of $70 to Cash.
  4. A debit entry of $50 to the Accounts Receivable account was incorrectly recorded as a debit entry of $50 to the Cash account.
  5. A cash sale of $890 was incorrectly recorded in the journal as a cash sale of $980.
  6. The debit portion of a journal entry to record a $60 credit sale was posted to the ledger, but the credit portion of this entry was not posted.
  7. A $150 credit entry in the journal to the Accounts Payable account was posted as a credit to the Accounts Receivable account in the ledger.
  8. An entire entry in the journal to record the $75 payment to the City of Orlando for an annual business license fee was omitted in the posting process.
  9. A debit of $200 to the Equipment account was incorrectly posted as a $200 credit to the Equipment account.
  10. The debit portion of a journal entry to record a $80 sale on account was posted to the ledger twice.
  11. A $40 cash sale was completely omitted from the journal.
  12. A $45 cash sale was recorded in the journal twice.
  13. The balance in the Cash account was calculated incorrectly at $1,700. It should be $1,640.
  14. A payment on account of $190 was journalized and posted as a debit to Repairs Expense and a credit to cash for $190.
  15. A cash receipt of $80 from a customer on account was recorded twice in the journal.
  16. The debit portion of a journal entry to record a cash sale was correctly posted to the ledger for $120. The credit portion of the same journal entry was posted to the Sales account in the ledger for $210.

Instructions

For each error, indicate (a) whether or not the resulting trial balance will balance. If the trial balance will not balance, indicate (b) the amount of the difference, and (c) the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error (1) is given as an example.

Error

(a)
In Balance?

(b)
$ Difference

(c)
Larger Column

(1)

No

$500

Credit

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

(15)

(16)