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account (50)account receivable (62)assets (52)balance of the account (51)capital account (52)chart of accounts (52)correcting journal entry (70)credit (51)debit (51)double-entry accounting

system (53)

drawing (52)expenses (53)horizontal analysis (71)journal (55)journal entry (56)journalizing (56)ledger (52)liabilities (52)normal balance of an

account (54)owners equity (52)

posting (59)revenues (53)rules of debit and credit (53)slide (69)T account (50)transposition (69)trial balance (68)unadjusted trial balance (68)unearned revenue (60)

Key Terms

J. F. Outz, M.D., has been practicing as a cardiologist for three years. During April 2009,Outz completed the following transactions in her practice of cardiology:

Apr. 1. Paid office rent for April, $800.3. Purchased equipment on account, $2,100.5. Received cash on account from patients, $3,150.8. Purchased X-ray film and other supplies on account, $245.9. One of the items of equipment purchased on April 3 was defective. It was

returned with the permission of the supplier, who agreed to reduce theaccount for the amount charged for the item, $325.

12. Paid cash to creditors on account, $1,250.

Illustrative Problem

A trial balance is prepared by listing theaccounts from the ledger and their balances.The totals of the Debit column and Credit col-umn of the trial balance must be equal. If thetwo totals are not equal, an error has occurred.Errors may occur even though the trial balancetotals are equal. Such errors may require acorrecting journal entry.

2-6 2-6A, 2-6B

2-7 2-7A, 2-7B

4

Prepare an unadjusted trialbalance.

Discover errors that cause un-equal totals in the trial balance.

Prepare correcting journalentries for various errors.

Prepare an unadjusted trial balance and explain how it can be used to discover errors.

Key Points Key Learning OutcomesExample PracticeExercises Exercises