Lester Company Uses Special Journals to Record Transactions

question 20

Essay

Lester Company uses special journals to record transactions.All of the companies listed below supply inventory to Lester except Harry Co.that supplies equipment.Use the purchases journal given below to answer the following questions:
a.Foot and crossfoot the journal for accuracy.
b.Identify the error and indicate how to correct the error.
c.When Lester compares the general ledger Accounts Payable account to the Accounts Payable ledger,it notices that the general ledger control account is $10,000 more that the schedule of Accounts Payable.What is the most likely cause and how should it be corrected?

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Definitions:

Economic Rents

The excess payment made to a factor of production over and above what is needed to bring that factor into production, often seen as a measure of market inefficiency.

Aggregate

A total sum or amount made up of distinct components, often used in economics to refer to total output or income.

Equilibrium

An equilibrium where demand meets supply in the marketplace, stabilizing prices as a consequence.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.