An Example of an Error Would Be

question 42

Multiple Choice

An example of an error would be:

• A) Purchasing inventory from a related party.
• B) Counting an inventory item twice when taking a physical inventory.
• C) Holding back invoices so that accounts payable are understated.
• D) Receiving kickbacks in exchange for issuing a purchase order to a vendor.

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Definitions:

Accounting Equation

The fundamental equation of double-entry bookkeeping, stating that Assets = Liabilities + Equity.

Debit And Credit

A fundamental concept in accounting that describes the two sides of every financial transaction; debits increase assets or decrease liabilities, while credits decrease assets or increase liabilities.

Dr. And Cr.

Abbreviations for Debit (Dr.) and Credit (Cr.), fundamental concepts in accounting used to record business transactions in the ledger.

Increase And Decrease

Refers to the upward or downward movement in financial metrics, operational quantities, or statistical values.