The Following Errors in Recording the Transactions for December Were

question 52

Essay

The following errors in recording the transactions for December were discovered in the general journal the next month after the data had been posted to the ledger. Record the necessary correcting entries on page 12 of a general journal. Omit the descriptions.
Dec. 5 Discovered that a purchase of office equipment for $1,000 cash was recorded as a debit to Shop Equipment and a credit to Cash
10 Discovered that a check for $2,500 to the owner, Hank Rudolph, to pay one month's utilities on his personal apartment was recorded as a debit to Utilities Expense and a credit to Cash
15 Discovered that a receipt of $30,000 cash from a customer for services performed was recorded as a debit to Cash and a credit to Accounts Receivable
20 Discovered that $3,000 for this month's rent was recorded as a debit to Cash and a credit to Prepaid Rent

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Definitions:

Budgeted Cash Disbursements

Budgeted cash disbursements are forecasted cash payments during a specific period, part of cash flow planning.

Bad Debts

Accounts receivable that are considered uncollectible and are written off as a loss.

General Operating Expenses

These are the day-to-day expenses necessary for the management and administration of a business, such as rent, utilities, and payroll.

Collections

The process of pursuing payment on debts owed by individuals or businesses, typically involving accounts receivable.