Which of the Following Errors, Each Considered Individually, Would Cause

question 197

Multiple Choice

Which of the following errors, each considered individually, 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:

After-Tax Discount Rate

Reflects the rate of return on an investment after all taxes have been paid, useful for evaluating the real profitability of investments.

Working Capital

The variance between an organization's existing resources and immediate liabilities, demonstrating the financial liquidity to support day-to-day operations.

Straight-Line Depreciation

An operation for spreading the cost of a physical asset throughout its effective life in regular yearly installments.

Initial Investments

The upfront capital invested in a project or company, which may include the purchase of equipment, buildings, or starting funds for operations.