Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 3 - The Accounting Information System - Questions - Page 137: 22

Answer

(a) Error does not affect trial balance (b) Error does affect trial balance

Work Step by Step

(a) The journal entry was recorded incorrectly for this transaction; however, it would not prevent the trial balance from balancing, since both the debit and credit amounts were $600. (b) This transaction records the proper accounts, but not for the correct amounts. The error made in this transaction would prevent the trial balance from balancing, and it would be off by 720 dollars (800 - 80).
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