**Understanding the Impact of Journal Entry Errors on Trial Balance***Scenario:*A journal entry for a $75 payment for rent expense was posted incorrectly as a debit to Salaries Expense and a credit to Cash.*Question:*Which of the following statements correctly states the effect of the error on the trial balance?*Options:*- **A.** The sum of the debits will exceed the sum of the credits by $75.- **B.** The sum of the debits will exceed the sum of the credits by $150.- **C.** The sum of the credits will equal the sum of the debits.- **D.** The sum of the credits will exceed the sum of the debits by $150.*Explanation:*When a payment for rent expense is mistakenly posted as a debit to Salaries Expense (instead of Rent Expense), the overall financial records do not balance as intended. The accurate posting should be Rent Expense (Debit) and Cash (Credit). However, the error results in one side (Debit) noting $75 under an incorrect account (Salaries Expense) while the other side (Credit) correctly reduces Cash by $75.*Impact:*The Debit side has an additional $75 in Salaries Expense, which wasn't supposed to be there, while Rent Expense remains understated by $75. The overall effect is that the trial balance reflects an imbalance where the sum of debits is $75 more than the sum of credits.Thus, the correct statement is:- **Option A.** The sum of the debits will exceed the sum of the credits by $75.

The error in trial balance can be incurred due to omissions or error in posting.

A journal entry for a $75 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash. Which of the following statements correctly states the effect of the error on the trial balance? O A. The sum of the debits will exceed the sum of the credits by $75. O B. The sum of the debits will exceed the sum of the credits by $150. O C. The sum of the credits will equal the sum of the debits. O D. The sum of the credits will exceed the sum of the debits by $150.

A journal entry for a $75 payment for rent expense was posted as a debit to Salaries Expense and a credit to Cash. Which of the following statements correctly states the effect of the error on the trial balance? O A. The sum of the debits will exceed the sum of the credits by $75. O B. The sum of the debits will exceed the sum of the credits by $150. O C. The sum of the credits will equal the sum of the debits. O D. The sum of the credits will exceed the sum of the debits by $150.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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