You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error.

You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error. Specifically, a correctly journalized credit purchase of an automobile for $17,850 is posted from the journal to the ledger with an $17,850 debit to Automobiles and another $17,850 debit to Accounts Payable. The Automobiles account has a debit balance of $42,304 on the trial balance. Answer each of the following questions and compute the dollar amount of any misstatement.

Explanation

1. The debit column is correctly stated because the erroneous debit (to Accounts Payable) is deducted from an account with a (larger assumed) credit balance.
2. The credit column is understated by $35,700 because Accounts Payable was debited — it should have been credited.
3. The automobiles account balance is correctly stated.
4. The Accounts Payable account balance is understated by $35,700. It should have been increased (credited) by $17,850 but the posting error decreased (debited) it by $17,850.

 e. If the debit column total of the trial balance is $374,850 before correcting the error, what is the total of the credit column before correction?


The credit column is $35,700 less than the debit column, or $339,150 in total ($374,850 – $35,700).

bbb