Which of the Following Balances Is Always Due to an Error

question 164

Multiple Choice

Which of the following balances is always due to an error?

• A) Office Equipment - credit balance of $500
• B) Retained Earnings - debit balance of $1,000
• C) Dividends - debit balance of $2,500
• D) Accounts Payable - debit balance of $600

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in production compared to other factors like labor; high ratios suggest a reliance on physical assets and machinery.

Capacity

refers to the maximum level of output that a company can sustain to produce goods or services under normal working conditions.

Retention Ratio

This metric indicates the percentage of net income a firm retains to reinvest in its business rather than distributing to shareholders as dividends.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders in the form of dividends.