Which of the Following Errors Would Cause the Trial Balance

question 6

Multiple Choice

Which of the following errors would cause the trial balance totals to be unequal?

• A) A transaction was not posted.
• B) A payment of $67 for insurance was posted as a debit of $76 to Prepaid Insurance and a credit of $76 to Cash.
• C) A payment of $4,450 to a creditor was posted as a debit of $4,500 to Accounts Payable and a credit of $450 to Accounts Receivable.
• D) Cash received from customers on account was posted as a debit of $720 to Cash and a credit of $720 to Accounts Payable.

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Definitions:

Direct Labor-Hours

The cumulative hours that employees engaged in the manufacturing process have completed.

Variable Overhead Rate

The portion of overhead costs that varies directly with production volume, calculated as variable overhead costs divided by a certain measure of activity (e.g., labor hours or machine hours).

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of production, such as salaries, rent, and insurance.

Master Budget

A comprehensive financial plan made up of several individual budgets that represent the company's operations and financial goals for a specific period.