Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 39

Assume that Sunshine Realty Co. borrowed $300,000 from Columbia First Bank and Trust. In recording the transaction, Sunshine erroneously recorded the receipt as a debit to Cash, $300,000, and a credit to Fees Earned, $300,000. (a) How would this error affect the equality of the trial balance (b) How would this error affect the income statement, statement of owner's equity, and balance sheet