An Examination of the Accounts of Salvage Company for the Month

question 18

Essay

An examination of the accounts of Salvage Company for the month of June revealed the following errors after the transactions were journalized and posted.
1. A check for $950 from S. Wilde, a customer on account, was debited to Cash $950 and credited to Service Revenue, $950.
2. A payment for Advertising Expense costing $720 was debited to Utilities Expense, $270 and credited to Cash $270.
3. A bill for $950 for Supplies purchased on account was debited to Equipment, $590 and credited to Accounts Payable $590.
Instructions
Prepare correcting entries, with explanations, 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.

---

Definitions:

Decision Making

The cognitive process resulting in the selection of a belief or course of action among several possible alternatives.

Behavioral Environments

refer to the surroundings or conditions in which a person operates, which influence and are influenced by the individual's actions and behaviors.

Modifying Behavior

The process of changing or adapting one's actions or reactions to achieve a specific outcome.

Operant Conditioning

Modifying behavior through the use of positive or negative consequences following specific behaviors.