A Company Incorrectly Recorded a Receipt of Cash on Account

question 69

Multiple Choice

A company incorrectly recorded a receipt of cash on account.Accounts Receivable was debited for $1,400 and Cash was credited for $1,400.Is the trial balance out of balance?

• A)No.
• B)Yes,by $1,400.
• C)Yes,by $2,800.
• D)Yes,by $4,200.

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Definitions:

Purchased Supplies

Items bought for use in the operation of a business, not intended for resale.

Increase Liabilities

The act of raising the amount of obligations or debts a company owes, which may affect its financial balance.

Reports

Documents containing organized information or data analysis used in decision-making, reflecting performance, financial health, and other critical metrics of an entity.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and stockholders' equity at a specific point in time.