1. While reviewing a trial balance, you notice the following account balances. Which one is likely to be an error? a. Inventory with a debit balance of $43,000 b. Discount on Bonds Payable with a debit balance of $4,000 c. Accumulated Depreciation with a debit balance of $8,000 d. Allowance for Doubtful Accounts with a credit balance of $23,000 2. Debiting an insurance payment to Rent Expense instead of Insurance Expense is an example of ... a. an accrual error b. a deferral error c. a classification error d. use of an incorrect accounting principle 3. InCo. recorded a customer's $20,000 check as a $20,000 debit to Cash and as a $2,000 credit to Accounts Receivable. This is an example of: a. an oversight b. an incorrect account classification c. a transposition error d. a slide error 4. During a bank reconciliation, a deposit recorded by the bank but not in the company's ledger Cash account is ... a. added to both the bank balance and the ledger Cash account balance b. added to the ledger Cash account balance only c. added to the bank balance only d. subtracted from the bank balance and added to the ledger Cash account balance 5. The bank statement balance of $7,000 does not include a check outstanding of $1,000, a deposit in transit of $275, and another company's $250 check erroneously charged against your firm's account. The reconciled bank balance is: a. $6,375 b. $6,580 c. $6,525 d. $6,570 Use the following information to answer questions 6-8. You are doing a bank reconciliation for May, 20X1. You have a $2,785 unadjusted ledger cash balance and the following data: - Outstanding checks: No. 719, $200; No. 727, $800; No. 732, $625 - Deposits in transit, $1,200 - Check No. 742 (for repairs) written for $505 but incorrectly recorded as $550 - NSF check from a customer, $500 - Bank service charge for May, $5 - Balance per bank statement, $2,750 6. What dollar amount should be deducted from the balance per bank statement? a. $1,425 b. $1,625 c. $505 d. $2,125 7. What dollar amount should be deducted from the balance per books? a. $460 b. $505 c. $550 d. $1,625 8. Which adjustment will you need to make to company books? a. a net decrease in Cash of $550 b. a net decrease in Cash of $505 c. a net decrease in Cash of $460 d. a net increase in Cash of $45 9. Which of the following errors would not be revealed by the trial balance? a. a sale debited to Accounts Receivable for $500 and credited to Sales for $50 b. a rent check debited to Rent Expense for $975 and credited to Cash for $795 c. collection of a receivable debited to Cash for $300 and credited to Accounts Payable for $300 d. payment of an account debited to Accounts Payable for $1,000 and debited to Cash for $1,000 10. A trial balance has total dehits of $197,900 and total credits of $199,700. Which accounl may contain a transposition error? a. A Cash account with a balance of $900 b. An Accounts Receivable with a balance of $1,800 c. A Cost of Goods Sold account with a balance of $4,200 d. An Accounts Payable with a balance of $5,300 Use the following trial balance to answer question 11. 11. Which account balance is listed in the wrong column? a. Cash b. Accounts Receivable c. Accounts Payable d. Discount on Bonds Payable e. Retained Earnings
