5 PE 0206 ALGO Algorithmic Trial Balance Errors For each of

5. PE 02-06 ALGO (Algorithmic) Trial Balance Errors For each of the following errors, considered indlvidually, Indicate whether the error would cause the trial balance totals to be unequal. the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much, If the debit and credit totals would be equal, enter zero (\"o* In the amount box a. The payment of an insurance premium of $7,450 for a three-year policy was debited to Prepaid Insurance for $7,540 and credited to Ca Which of the following is true? If the totals on the trial balance are not equal, by how much is one column higher than the ather? b. A payment of $2,200 on eccount was debited to Accounts Payable for $2,420 and credited to Cash for $2,420 Which of the following is true? If the totals on the trial balance are not equal, by how much is one column higher than the other? c. A purchase of supplies on account for $2,380 was debited to Supplies for $2,380 and debited to Accounts Payable for $2,380. Which of the following is true? If the totals on the trial balance are not equal, by how much is one column higher than the other?

Solution

Solution :

a. An amount of 7450 was wrongly recorede under the debit side as 7540 . Hence , this error would cause the trial balance to unmatch as the debit was for 7450 while the cooresponding credit was only for 7450.

The debit column would be higher by 90. (7540-7450)

b. Since both the debit side and the credit side were wrongly recorded at 2420 , the trail balance would still match even if the amounts were recorded incorrecly as provided in the transaction.

Here, the amount would be 0 .

c.The amount of 2380 was debited twice while posting to the trial balance. Hence, the trail balance would not match at all.

Here the amount of difference would be 2380