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:

Non Est Factum

A defense in contract law where a person argues they were unaware of the nature of the document signed due to a significant mistake.

Misrepresentation

A false statement of fact made by one party to another, which has the effect of inducing that party into entering a contract.

Remedies

Legal measures or actions available to a party to enforce a right or redress a harm.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly intended to deceive the other party, leading to a contract or agreement being voidable.