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The following selected transactions were completed during August of the current year: Aug. 1 Billed customers for fees earned, $72,960. 4 Purchased supplies on account, $1,900. 8 Received cash from customers on account, $65,960. 11 Paid creditors on account, $840. A. Journalize these transactions In a two-column journal. B. Post the entries prepared , in (A) to the Mowing T accounts: Cash, Supplies. Accounts Receivable. Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, select the appropriate date. C. Assume that the unadjusted trial balance on August 31 shows a credit balance for Accounts Receivable. does this credit balance mean an error has occurred?
Expert Answer
A. Journal Entries :
| Date | Account Titles | Debit | Credit |
| $ | $ | ||
| Aug 1 | Accounts Receivable | 72,960 | |
| Fees Earned | 72,960 | ||
| Aug 4 | Supplies | 1,900 | |
| Accounts Payable | 1,900 | ||
| Aug 8 | Cash | 65,960 | |
| Accounts Receivable | 65,960 | ||
| Aug 11 | Accounts Payable | 840 | |
| Cash | 840 |
B. T accounts :
Cash
| Date | Debit | Date | Credit |
| Aug 8 | 65,960 | ||
| Aug 11 | 840 | ||
| Totals | 65,960 | Totals | 840 |
Supplies
| Date | Debit | Date | Credit |
| Aug 4 | 1,900 | ||
| Totals | 1,900 | Totals | 0 |
Accounts Receivable
| Date | Debit | Date | Credit |
| Aug 1 | 72,960 | ||
| Aug 8 | 65,960 | ||
| Totals | 72,960 | Totals | 65,960 |
Accounts Payable
| Date | Debit | Date | Credit |
| Aug 4 | 1,900 | ||
| Aug 11 | 840 | ||
| Totals | 840 | Totals | 1,900 |
Fees Earned
| Date | Debit | Date | Credit |
| Aug 1 | 72,960 | ||
| Totals | 0 | Totals | 72,960 |
C. It could mean the either of two things :
1. There could be both recording and posting errors.
2. The customers have paid more than they were liable for.
