A Trial Balance Would Only Help in Detecting Which One

question 102

Multiple Choice

A trial balance would only help in detecting which one of the following errors?

• A) A transaction that is not journalized
• B) A journal entry that is posted twice
• C) Offsetting errors are made in recording the transaction
• D) A transposition error when transferring the debit side of journal entry to the ledger

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Definitions:

Lockboxes

A banking service where payments are sent to a special post office box rather than to the company's offices, to speed up transaction processing.

Disbursement Float

The time lag between when a payment is made by writing a check and when the funds are actually removed from the payer's account.

Float Costs

The expenses associated with issuing new stocks or bonds, including underwriting, legal, and registration fees.

Optimal Cash Balance

The ideal amount of cash a company should hold to minimize both holding costs and transaction costs.