If the Balance Sheet and Statement of Owner's Equity Columns

question 114

Multiple Choice

If the Balance Sheet and Statement of Owner's Equity columns of a work sheet fail to balance when the amount of the net income is added to the Balance Sheet and Statement of Owner's Equity Credit column,the cause could be:

• A)An expense amount entered in the Balance Sheet and Statement of Owner's Equity Debit column.
• B)A revenue amount entered in the Balance Sheet and Statement of Owner's Equity Credit column.
• C)An asset amount entered in the Income Statement and Statement of Owner's Equity Debit column.
• D)A liability amount entered in the Income Statement and Statement of Owner's Equity Credit column.
• E)An expense amount entered in the Balance Sheet and Statement of Owner's Equity Credit column.

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Definitions:

Interest Expense

The expenses an entity faces for borrowing money.

Sunk Costs

Costs that have already been incurred and cannot be recovered or altered and should not affect current and future business decisions.

Erosion Costs

Costs incurred when a new project or product negatively impacts the sales and profits of existing products or services.

Operating Cash Flow

The money a company makes from core business activities excluding costs associated with financing or investments.