When a Transposition Error Is Made on the Trial Balance

question 12

Multiple Choice

When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be

• A) zero
• B) twice the amount of the transposition
• C) one-half the amount of the transposition
• D) divisible by 9

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Definitions:

Capital Allocation Line

A graph showing risk-return trade-offs of different portfolios, with risk measured on the x-axis and expected return on the y-axis, aiming to optimize portfolio allocation.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean, used in finance to measure the volatility of an investment.

Risk-Free Asset

Risk-Free Asset is an investment with no risk of financial loss, often represented by government bonds of stable economies.

Asset Allocation

Allocating a portfolio across broad asset classes such as stocks versus bonds.