It Is Obvious That an Error Occurred in the Preparation

question 109

Multiple Choice

It is obvious that an error occurred in the preparation and/or posting of closing entries if:

• A) only permanent accounts appear on the post-closing trial balance.
• B) all balance sheet accounts have zero balances.
• C) the income summary account is debited for the amount of net income for the period.
• D) the owner's capital account is debited for the amount of the net loss for the period.
• E) all revenue and expense accounts have zero balances.

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Definitions:

Next of Kin

The closest living relative or relatives to someone, particularly important in legal contexts such as inheritance or emergency decisions.

Intestate

Having died without leaving a valid will. Compare testate.

Uniform Simultaneous Death Act

A legal guideline used to determine the distribution of property when two or more individuals die at the same time with no clear evidence of who died first.

Insurance Proceeds

The money that an insurance company pays out to a policyholder in the event of a covered loss or claim.