A $15 Credit to Sales Was Posted as a $150

question 78

Multiple Choice

A $15 credit to Sales was posted as a $150 credit. By what amount is Sales out of balance?

• A)$150 understated.
• B)$150 overstated.
• C)$135 understated.
• D)$135 overstated.
• E)$15 understated.

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Definitions:

Net Plant

The total value of a company's property, plant, and equipment minus accumulated depreciation, representing the net book value of physical assets used in operations.

Operating Cycle

This refers to the period of time it takes for a business to purchase inventory, sell products, and receive cash from sales.

Sales on Account

Transactions in which goods or services are sold but payment is deferred, creating accounts receivable for the seller.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company, including material, labor, and manufacturing overhead costs.