The Following Errors Were Made in April 2014 by the Accountant

question 106

Essay

The following errors were made in April 2014 by the accountant for Amanda's Cleaning Services:
1. Equipment purchased for $4,600 was entered as a debit to Cash and a credit to Accumulated Depreciation-Equipment.
2. A payment was made to the telephone company for $195. It was a payment for the March telephone bill that had been recorded as Telephone Expense in March. The accountant recorded the April payment as a debit to Telephone Expense and a credit to Cash.
3. A customer paid a deposit for work that is to be completed in May 2014 in the amount of $500. The accountant recorded the deposit as a debit to cash and a credit to Service Revenue.
4. Bank service charges were recorded as Debit Cash and Credit Bank Charges Expense for $52.
Instructions
Prepare the correcting entries for these errors at April 30, 2014.

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Definitions:

Overconfidence

A cognitive bias where an individual overestimates their abilities or the precision of their knowledge, often leading to mistakes in judgment.

Behavioral Biases

Psychological tendencies that affect investment decisions and financial behaviors.

Fundamental Risk

Risk that even if an asset is mispriced, there is still no arbitrage opportunity because the mispricing can widen before the price eventually converges to intrinsic value.

Implementation Costs

Refers to the expenses involved in putting a business plan or project into action, including technology, manpower, training, and other related costs.