A Journal Entry for a $250 Payment to Purchase Supplies

question 62

Multiple Choice

A journal entry for a $250 payment to purchase supplies was erroneously recorded as a debit to Supplies for $520 and a credit to Cash for $250.Which of the following statements about the trial balance is TRUE?

• A) The sum of the credits will exceed the sum of the debits by $270.
• B) The sum of the debits will exceed the sum of the credits by $250.
• C) The sum of the debits will exceed the sum of the credits by $270.
• D) The trial balance will be in balance; the sum of the credits will equal the sum of the debits.

Understand the concept and application of common-sized financial statements.

Grasp the principles and calculation methods for horizontal analysis.

Comprehend vertical analysis and its application in evaluating financial statements.

Appreciate the significance of ratio analysis in assessing a company's liquidity, solvency, and profitability.

---

Definitions:

Excitatory Input

Neural input that increases the likelihood of the firing of an action potential in receiving neurons, facilitating neuron-to-neuron communication.

Threshold

The minimum level of stimulus intensity required for a stimulus to be detected or for a response to occur.

Endorphins

Neurotransmitters produced in the brain that act as natural painkillers and also improve mood, often released in response to stress or exercise.

Norepinephrine

A neurotransmitter and hormone involved in arousal, alertness, and the regulation of blood pressure.