Instructions: Select the letter that represents the best answer to each multiple choice question below and mark it on the Answer Sheet (page 141). Ignore tax effects. Allow approximately 2 hours. 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 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 da 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 badded 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 127