Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

If the formula in cell D10 is \(=D8+D9+D10\), which of the following terms best describes the error in this formula?

Compensating error

Transposition error

Omission error

Circular reference

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Verified step by step guidance

Understand the concept of a circular reference: A circular reference occurs when a formula in a cell refers back to itself, either directly or indirectly, creating an endless loop that prevents proper calculation.

Analyze the formula in cell D10: The formula is \(=D8+D9+D10\). Notice that the formula includes D10 itself, which is the cell where the formula is located.

Identify the issue: Since the formula in D10 refers to D10 itself, this creates a circular reference. The calculation cannot proceed because the formula depends on its own result.

Compare the error types: A compensating error occurs when one error offsets another, a transposition error involves swapping digits (e.g., 45 instead of 54), and an omission error involves leaving out data. None of these apply to the given formula.

Conclude that the error is a circular reference: Based on the analysis, the term that best describes the error in the formula is 'Circular reference.'