During an Accounting Period, a Transaction Occurred Involving the Purchase

question 2

Multiple Choice

During an accounting period, a transaction occurred involving the purchase of equipment for $9000. On reviewing the worksheet, it was discovered that the transaction had not been recorded. The most likely reason that the omission was picked up is:

• A) the worksheet did not balance by $9000.
• B) the imbalance was divisible by 9.
• C) the omission was picked up by a diligent bookkeeper.
• D) the worksheet did not balance by $4500.

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Definitions:

Exercise Price

The specified price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Time To Expiration

The period remaining until the expiration date of a contract, such as an option or futures contract.

Stock Price

The cost of purchasing a share of a company, which can fluctuate based on market conditions.

Intrinsic Value

The actual, inherent value of a financial security, determined through fundamental analysis without reference to its market value.