Trial Balance Errors For each of the following errors, considered individually,

Question

Trial Balance Errors

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much. If the debit and credit totals would be equal, enter zero ("0") in the amount box.

a. The payment of an insurance premium of $5,400 for a three-year policy was debited to Prepaid Insurance for $5,400 and credited to Cash for $4,500.

Indicate whether the debit or credit total is higher and by how much.
SelectThe credit total is higherThe debit total is higherThe debit and credit totals would be equalItem 1 by $

b. A payment of $270 on account was debited to Accounts Payable for $720 and credited to Cash for $720.

Indicate whether the debit or credit total is higher and by how much.
SelectThe credit total is higherThe debit total is higherThe debit and credit totals would be equalItem 3 by $

c. A purchase of supplies on account for $1,600 was debited to Supplies for $1,600 and debited to Accounts Payable for $1,600.

Indicate whether the debit or credit total is higher and by how much.
SelectThe credit total is higherThe debit total is higherThe debit and credit totals would be equalItem 5 by $

Explanation / Answer

Answer :- (a)

Insurance expenses ....................debit $5400

To cash $4500

To prepaid insurance $900

(b) Accounts payable ..................debit $720

To cash $450

To payments $270

(c) Purchases ....................debit $1600

Supplies ......................debit $1600

To Accounts payable $3200

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