A Journal Entry for a $75 Payment for Rent Expense

question 10

Multiple Choice

A journal entry for a $75 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash. This error will cause which of the following conditions on the trial balance?

• A)The sum of the credits will equal the sum of the debits.
• B)The sum of the debits will exceed the sum of the credits by $75.
• C)The sum of the debits will exceed the sum of the credits by $150.
• D)The sum of the credits will exceed the sum of the debits by $150.

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Definitions:

Break-Even Points

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Break-Even Sales

The amount of revenue required to cover a company's total fixed and variable costs, beyond which the company starts generating a profit.

Blue Division

A hypothetical division or business unit within a company, perhaps denoted for identification or strategic purposes.

Net Operating Income

The profit generated from a company's everyday operations, excluding income and expenses not related to its core activities.