A Journal Entry for a $210 Payment to Purchase Office

question 74

Multiple Choice

A journal entry for a $210 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $550 and a credit to Cash for $210.Which of the following statements correctly states the effect of the error on the trial balance?

• A) The sum of the credits will exceed the sum of the debits by $340.
• B) The sum of the debits will exceed the sum of the credits by $210.
• C) The sum of the debits will exceed the sum of the credits by $340.
• D) The sum of the debits will exceed the sum of the credits by $550.

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Definitions:

Financial Capital

Financial Capital refers to the funds provided by lenders (and investors) to businesses to purchase real capital equipment for producing goods/services.

Infrastructure

The fundamental physical and organizational structures and facilities (e.g., buildings, roads, power supplies) needed for the operation of a society or enterprise.

Brain Drain

The tendency for talented people from developing countries to become educated in a developed country and remain there after graduation.

Developing Countries

are nations with a lower living standard, underdeveloped industrial base, and low Human Development Index (HDI) compared to more developed countries.