In Which of the Following Situations Would the Trial Balance

question 106

Multiple Choice

In which of the following situations would the trial balance not balance?

• A) A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
• B) The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable.
• C) A $50 cash receipt for the performance of a service was not recorded at all.
• D) The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
• E) The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

---

Definitions:

Useful Life

The estimated period over which an asset is expected to be used before it is considered no longer useful by the owner.

Loss

The result of a company's expenditures surpassing its revenues, leading to financial detriment.

Fair Market Value

The price at which an asset would change hands between a willing buyer and seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Commercial Substance

A transaction has commercial substance if it significantly changes the economic position or cash flows of the entity.