From the list at the top of the next page, identify the accounts that should be closed to Income Summary at the end of the fiscal year:

From the list at the top of the next page, identify the accounts that should be closed to Income Summary at the end of the fiscal year:


a. Accounts Payable
b. Accumulated Depreciation—Equipment
c. Depreciation Expense—Equipment
d. Equipment
e. Ernie Hale, Capital
f. Ernie Hale, Drawing
g. Fees Earned
h. Land
i. Supplies
j. Supplies Expense
k. Wages Expense
l. Wages Payable


Answer:
c. Depreciation Expense—Equipment

g. Fees Earned

j. Supplies Expense

k. Wages Expense

Note: Ernie Hale, Drawing is closed to Ernie Hale, Capital rather than to Income Summary.

The following errors occurred in posting from a two-column journal: 1. A credit of $6,000 to Accounts Payable was not posted.

The following errors occurred in posting from a two-column journal:

1. A credit of $6,000 to Accounts Payable was not posted.

2. An entry debiting Accounts Receivable and crediting Fees Earned for $5,300 was not posted.

3. A debit of $2,700 to Accounts Payable was posted as a credit.

4. A debit of $480 to Supplies was posted twice.

5. A debit of $3,600 to Cash was posted to Miscellaneous Expense.

6. A credit of $780 to Cash was posted as $870.

7. A debit of $12,620 to Wages Expense was posted as $12,260.

Considering each case individually (i.e., assuming that no other errors had occurred), indicate: (a) by “yes” or “no” whether the trial balance would be out of balance; (b) if answer to (a) is “yes,” the amount by which the trial balance totals would differ; and (c) whether the Debit or Credit column of the trial balance would have the larger total. Answers should be presented in the following form, with error (1) given as an example:


(a) (b) (c) Error Out of balance Difference Larger Total 1. yes $6,000 debit



Answer:

(a)  (b)   
(c) 
Error  Out of Balance  Difference  1.  yes  $6,000 2.  no  — 3.  yes  5,400 4.  yes  480 5.  no  — 6.  yes  90 7.  yes  360 
Larger Total debit — credit debit — credit credit 

During March, $276,500 was paid to creditors on account, and purchases on account were $261,000

a. During March, $276,500 was paid to creditors on account, and purchases on account were $261,000. Assuming the March 31 balance of Accounts Payable was $76,000, determine the account balance on March 1.

b. On July 1, the accounts receivable account balance was $49,000. During July, $525,000 was collected from customers on account. Assuming the July 31 balance was $61,500, determine the fees billed to customers on account during July.

c. On September 1, the cash account balance was $28,440. During September, cash receipts totaled $112,100 and the September 30 balance was $33,200. Determine the cash payments made during September.

Answer:

a.   Accounts Payable   Mar. 1 X  276,500    261,000    Mar. 31 76,000  X + $261,000 – $276,500 = $76,000 X = $76,000 + $276,500 – $261,000 X = $91,500   
b.  Accounts Receivable July  1  49,000  525,000 X July  31  61,500  $49,000 + X – $525,000 = $61,500 X = $61,500 + $525,000 – $49,000 X = $537,500   
c.  Cash  Sept.  1 28,440  X  112,100   Sept.  30 33,200    $28,440 + $112,100 – X = $33,200 X = $28,440 + $112,100 – $33,200 X = $107,340   

Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owner’s equity: a. accounts payable

Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owner’s equity:

a. accounts payable
b. cash
c. fees earned
d. land
e. supplies
f. wages expense

Answer:
a. (2) liability
b. (1) asset
c. (3) owner's equity (revenue)
d. (1) asset
e. (1) asset
f. (3) owner's equity (expense)