For Each of the Following Errors, Indicate on the Schedule

question 53

Essay

For each of the following errors, indicate on the schedule the amount it will cause the trial balance to be out of balance and which trial balance column (i.e., debit or credit) will have the larger total as a result of the error.(a) A $100 debit to Cash was debited to the Cash account twice.(b) A $1,900 credit to Sales was posted as a $190 credit.(c) A $5,000 debit to Office Equipment was debited to Office Supplies.(d) A $625 debit to Prepaid Insurance was posted as a $62.50 debit.(e) A $520 debit to Supplies (purchased on account) was posted correctly, but the corresponding credit to Accounts Payable was not posted.

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Definitions:

Financial Planning Method

A systematic approach to setting financial goals, developing and implementing plans to achieve those goals, and monitoring progress.

Predicted Sales

Forecasted revenue from goods or services sold over a future period, based on current trends or analyses.

Sales Dilution Approach

A method used in finance to estimate the impact of issuing new shares on the earnings per share by assuming no increase in sales.

Pro Forma Balance Sheets

Financial statements prepared in advance of a planned transaction, showing the expected financial position of a company.