The bookkeeper for Jeff Sobol Equipment Repair made a number of errors in journalizing and posting, as described below. a. A credit posting of $485 to Accounts Receivable was omitted.
b. A debit posting of $730 for Prepaid Insurance was debited to Insurance Expense.
c. A collection from a customer of $130 in payment of its account owed was journalized and posted as a debit to Cash $130 and a credit to Service Revenue $130.
4. A credit posting of $415 to Property Taxes Payable was made twice.
5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25.
6. A debit of $475 to Advertising Expense was posted as $457.

Required:
For each error:

a. Indicate whether the trial balance will balance.
b. If the trial balance will not balance, indicate the amount of the difference.
c. Indicate the trial balance column that will have the larger total.

Jeff Sobol Equipment Repair

a. Indication of whether the trial balance will balance with each error:

1. No.

2. Yes.

3. Yes

4. No.

5. No.

6.No.

b. The amount of the difference:

1. $485

2. $0

3. $0

4. $415

5. $225

6. $18

c. Indication of the trial balance column that have the larger total:

1. Debit

2. N/A

3. N/A

4. Credit

5. Debit

6. Credit

Explanation:

a) Data and Calculations:

1. Debit side greater by $485

2. No effect on the trial balance.

3. No effect on the trial balance

4. Credit side greater by $415

5. Debit side greater by $225 ($250 -$25)

6. Credit side greater by $18 ($475 -457)

b) The trial balance shows that the double entry system has been correctly maintained.  It does not reveal some posting errors, e.g. errors of transposition, omission, commission, and compensatory errors.  It only reveals clerical (human) errors and errors of principle (wrong application of accounting principles).

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