Bill Kilmer CPA was asked by Karol King to review the accounting records and prepare the financial statements for her upholstering shop. Bill reviewed the records and found three errors.
1. Cash paid on accounts payable for $810 was recorded as a debit to Accounts Payable $180 and a credit to Cash $180.
2. The purchase of supplies on account for $400 was debited to Equipment $400 and credited to Accounts Payable $400.
3. Karol withdrew $1700 of cash and the bookkeeper debited Accounts Receivable for $170 and credited Cash $170.
Instructions
Prepare an analysis of each error showing the
(a) incorrect entry.
(b) correct entry.
(c) correcting entry.

Question

Quizplus · Accepted Answer

The Answer of Bill Kilmer CPA was asked by Karol King to review the accounting records and prepare the financial statements for her upholstering shop. Bill reviewed the records and found three errors.
1. Cash paid on accounts payable for $810 was recorded as a debit to Accounts Payable $180 and a credit to Cash $180.
2. The purchase of supplies on account for $400 was debited to Equipment $400 and credited to Accounts Payable $400.
3. Karol withdrew $1700 of cash and the bookkeeper debited Accounts Receivable for $170 and credited Cash $170.
Instructions
Prepare an analysis of each error showing the
(a) incorrect entry.
(b) correct entry.
(c) correcting entry.

Bill Kilmer CPA Was Asked by Karol King to Review