An Examination of the Accounts of Nash Company for the Month

question 199

Essay

An examination of the accounts of Nash Company for the month of June revealed the following errors after the transactions were journalized and posted.
1. A check for $750 from R. Joseph, a customer on account, was debited to Cash $750 and credited to Service Revenue, $750.
2. A payment for Advertising Expense costing $420 was debited to Utilities Expense, $240 and credited to Cash $240.
3. A bill for $840 for Office Supplies purchased on account was debited to Office Equipment, $480 and credited to Accounts Payable $480.
Instructions
Prepare correcting entries for each of the above assuming the erroneous entries are not reversed. Explain how the transaction as originally recorded affected net income for the month of June.

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Definitions:

Protuberance

A protuberance refers to a part of the body or an organ that projects out or bulges beyond the surface level, often due to swelling or growth.

Cytoplasmic Extensions

Projections or protrusions from the cell body, such as dendrites and axons in neurons, which help in communication and transport between cells.

Canaliculi

Small, channel-like structures within bone tissue that allow for the exchange of nutrients and waste products between blood vessels and osteocytes.

Perforating Canals

Perforating canals, also known as Volkmann's canals, are microscopic canals in bones that allow blood vessels and nerves to connect the outer part of the bone with the interior (marrow) and other canals within the bone.