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:

Social Loafing

The phenomenon where individuals exert less effort when working in a group than when working alone.

Collective Action

Action taken together by a group of people whose goal is to enhance their status and achieve a common objective.

System Justification Theory

A theory suggesting that people have a psychological tendency to defend and justify the status quo, even at the expense of personal or group interest.

Social Identity Theory

Social identity theory is a psychological framework that posits individuals derive part of their identity and self-esteem from the groups to which they belong.