A Company Failed to Post a $50 Debit to the Office

question 220

Multiple Choice

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that:

• A)The Office Supplies account balance will be overstated
• B)The trial balance will not balance
• C)The error will overstate the debits listed in the journal
• D)The total debits in the trial balance will be larger than the total credits
• E)All of the above effects will be caused by the error

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Definitions:

Bond Sinking Fund

A fund set aside by a corporation to repay bonds at maturity, ensuring the security of the bondholders' investment.

Bonds Payable

A long-term liability account that represents the amount a company owes to bondholders.

Accrued Interest

Interest that has accumulated over time but has not yet been paid by the borrower.

Beneath Face Value

Refers to when a security is trading for less than its nominal or face value.