An Examination of the Accounts of Freeman Company for the Month

question 193

Essay

An examination of the accounts of Freeman Company for the month of October revealed the following errors after the transactions were journalized and posted. Prepare correcting entries for each of the above assuming the erroneous entries are not reversed.
(a) A check for $700 was issued for goods previously purchased on account. The bookkeeper debited Accounts Receivable and credited Cash for $700.
(b) A check for $580 was received as payment on account. The bookkeeper debited Accounts Payable for $850 and credited Accounts Receivable for $850.
(c) When making the entry to record the year's depreciation expense, the bookkeeper debited Accumulated Depreciation for $1,500 and credited Cash for $1,500.
(d) When accruing interest on a note payable, the bookkeeper debited Interest Receivable for $200 and credited Interest Payable for $200.

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Definitions:

Sustainability

The use of resources to enable society to satisfy current needs, without compromising the ability of future generations to meet their needs.

Resources

Assets, materials, or other items of value that are available to an individual or organization to achieve goals or carry out activities.

Zero Emissions

Occur when carbon or polluting emissions are reduced and/or offset so that there is no net addition of emissions that are harmful to the environment or climate, usually by the emitting source.

Recycling

The process of converting waste materials into new materials and objects, aimed at reducing the consumption of fresh raw materials.