In Preparing a Work Sheet an Adjusted Trial Balance Amount

question 151

Multiple Choice

In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:

• A) A liability amount placed in the Income Statement Credit column.
• B) A liability amount placed in the Balance Sheet Debit column.
• C) An asset amount placed in the Balance Sheet Credit column.
• D) An expense amount placed in the Balance Sheet Credit column.
• E) A revenue amount placed in the Balance Sheet Debit column.

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Definitions:

Capital Gains Tax

A tax on the profit made from selling an asset for more than its purchase price, applicable to investments like stocks and real estate.

Fiscal Policy

The use of government spending and taxation to influence the economy.

Tax Increases

The act of raising governmental levies on income, property, sales, or transactions, leading to a higher financial burden on the taxed entities.

Severe Recession

A period of significant decline in economic activity across the economy that lasts for an extended period of time.