The Bookkeeper for B

question 141

Essay

The bookkeeper for B. Sebastian & Company, Inc. prepared the following journal entries and posted the entries to the general ledger as indicated in the T accounts presented. Assume that the dollar amounts and the descriptions of the entries are correct.
Journal entries: Payment is made for the office furniture bill received on May 15. See the journal entries and T accounts for B. Sebastian & Company.
REQUIRED: If you assume that all journal entries have been posted correctly, use the above information to answer these questions:
1 Identify the transactions that the bookkeeper recorded incorrectly in the general journal.
2 Prepare the journal entry that the bookkeeper should have made for each transaction that you have identified as being made incorrectly.
3 For each journal entry recorded incorrectly, indicate the impact of the error on the accounting equation. For your answer, indicate whether each element of the accounting equation, Assets, Liabilities, and Stockholders' Equity, has been "Understated" or "Overstated" or there has been "No Effect."

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Definitions:

Large Retailers

Retail businesses that operate on a large scale, typically having extensive networks of stores and considerable market presence.

Channel Functions

The activities and processes used to move goods from producers to consumers, including transportation, storage, and distribution.

Larger Firms

Business organizations characterized by a significant scale of operations, often including extensive employee numbers, product lines, and market reach.

Supply Chains

Encompass the entire chain of production from the sourcing of raw materials to the delivery of the final product to the consumer.