1. Billed customers for fees earned, $48,600.
2. Purchased supplies on account, $1,975.
3. Received cash from customers on account, $31,400.
4. Paid creditors on account, $1,350.
a. Journalize the above transactions in a two-column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted.
b. Post the entries prepared in (a) to the following T accounts: Cash, Supplies, Accounts Receivable, Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, place the appropriate number to identify the transactions.
c. Assume that the unadjusted trial balance on January 31 shows a credit balance for Accounts Receivable. Does this credit balance mean an error has occurred?
Answer:
a.
Accounts Receivable 48,600 Fees Earned 48,600 Supplies 1,975 Accounts Payable 1,975 Cash 31,400 Accounts Receivable 31,400 Accounts Payable 1,350 Cash 1,350
b.
Cash Accounts Payable (3) 31,400 (4) 1,350 (4) 1,350 (2) 1,975 Supplies Fees Earned (2) 1,975 (1) 48,600
Accounts Receivable (1) 48,600 (3) 31,400
c. No. A credit balance in Accounts Receivable could occur if a customer overpaid his or her account. Regardless, the credit balance should be investigated to verify that an error has not occurred.