Question

At year-end, a trial balance showed total credits exceeding total debits by $4,950. This difference could have been caused by: ______________

a. An error in the general journal where a $4,950 increase in Accounts Receivable was recorded as an increase in Cash.
b. A net income of $4,950.
c. An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.
d. The balance of $5,500 in the Office Equipment account being entered on the trial balance as a debit of $550.
e. The balance of $49,500 in Accounts Payable being entered in the trial balance as $4,950.

Answer 1

There are ways to know the differences in account. This difference could have been caused by An error in the general journal where a $4,950 increase in Accounts Payable was recorded as a decrease in Accounts Payable.

What is a trial balance?

A trial balance is a document that depicts all asset, liabilities etc. It is often prepared so as to ensure that posting of amounts and accounts are done well and right.

Here, the Total debits must equal total credits. The issue could have been caused by option d due to different factors.

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