Brief Exercise 4-09 At Raymond Company, the following errors were discovered after the transactions had been journalized and posted. 1. A collection on account from a customer for $870 was recorded as a debit to Cash $870 and a credit to Service Revenue $870. 2. The purchase of store supplies on account for $1,510 was recorded as a debit to Supplies $1,150 and a credit to Accounts Payable $1,150.

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Business

Marie Mayo

2 November, 09:56

Brief Exercise 4-09 At Raymond Company, the following errors were discovered after the transactions had been journalized and posted. 1. A collection on account from a customer for $870 was recorded as a debit to Cash $870 and a credit to Service Revenue $870. 2. The purchase of store supplies on account for $1,510 was recorded as a debit to Supplies $1,150 and a credit to Accounts Payable $1,150.

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Cheyanne Holmes · Answer 1

Dr Cash 870

Cr Account Receiable 870

Dr Supplies 360

Cr Account Payable 360

Explanation:

1. whenever sales is recorded, Account receivable is debited and sales revenue is credited, cash is recorded when collection is made against that receivable in this case directly cash has been recorded without first generating account receivable entry.

2. in this case (1510-1150=$360) of purchases has not been recorded therefore we have to create an entry of $360.