The Following Errors Were Made in Preparing a Trial Balance

question 63

Multiple Choice

The following errors were made in preparing a trial balance: the $1,350 balance of Inventory was omitted;the $450 balance of Prepaid Insurance was listed as a credit;and the $300 balance of Salaries Expense was listed as Utilities Expense.The debit and credit totals of the trial balance would differ by

• A) $1,350.
• B) $1,800.
• C) $2,100.
• D) $2,250.

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Definitions:

Operating Activities

Activities that are directly related to the day-to-day operations of a business, such as sales, purchase of inventory, and payment of expenses.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue; often referred to as the bottom line.

Transactions

Business activities or exchanges that affect the financial position of a company, involving the transfer of goods, services, money, or titles.

Investing Activities

Financial actions involving the purchase and sale of long-term assets and investments, part of a company's cash flow statement.