Assume That a Company Using a Purchases Journal Made an Error

question 53

Multiple Choice

Assume that a company using a purchases journal made an error in totaling the journal's accounts payable column. The error should be discovered:

• A) When the purchases journal is posted to the general ledger.
• B) When the sum of the vendor accounts does not equal the balance in the Purchases journal.
• C) When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account.
• D) When the creditors receive their payments.
• E) When the financial statements are prepared.

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Definitions:

Rate of Return

The rate of return is the net gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Standard Return

The typical or average return expected from an investment, benchmarked against similar investments or industry standards.

Investment

Investment refers to the use of capital to purchase assets with the potential to generate returns in the form of income, dividends, or capital gains.