80.2K

Verified Solution

Link Copied!

Q2. As a new employee of Software Company, the staff welcomed you and assigned the first and fresh task to analyze the following transactions. a) A cash receipt from payment on account was posted as debit to cash and credit to account receivable. The amount was $2500. b) The business purchased inventory on account which was posted as debiting inventory for $1000 and crediting cash $1000. c) The business paid an amount on account which was posted as debit to accounts payable for $1200 and crediting accounts receivable. d) Some supplies was purchase for cash for an amount of $500. The recording was carried out as a debit to cash and credit for supplies. e) The firm purchased bonds for $5000 and recorded as debit to bonds and credit to cash. f) The business sold the above bonds for $5500 cash. We could not record the transaction. Required: After seeing the above you don't know what to do. You contacted your boss and he, after looking at your state, assigned the following easy tasks for you to carry out. i. The above transactions are given in the form of debit and credit terms. Please show the effect of above transactions on the accounting equation. Please indicate if we have committed some mistakes in recording the above transactions. And will this make our trial balance to be equal or not. Please explain in short words for each transaction

Answer & Explanation Solved by verified expert

See Answer