A trial balance prepared at year-end shows total credits exceed total debits by $765. This discrepancy could have been caused by a. An error in the general journal where a $765 increase in Accounts Payable was recorded as a $765 decrease in Accounts Payable. b. The ledger balance for Accounts Payable of $7,650 being entered in the trial balance as $765. c. A general journal error where a $765 increase in Accounts Receivable was recorded as a $765 increase in Cash. d. The ledger balance of $850 in Accounts Receivable was entered in the trial balance as $85. e. An error in recording a $765 increase in Cash as a credit.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
A
total debits by $765. This discrepancy could have been
caused by
a. An error in the general journal where a $765 increase in
Accounts Payable was recorded as a $765 decrease in
Accounts Payable.
b. The ledger balance for Accounts Payable of $7,650 being
entered in the trial balance as $765.
c. A general journal error where a $765 increase in
Cash.
d. The ledger balance of $850 in Accounts Receivable was
entered in the trial balance as $85.
e. An error in recording a $765 increase in Cash as a
credit.
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