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

Trial Balance

Financial Accounting

2. Transaction Analysis

Trial Balance

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Multiple Choice

Which of the following errors would cause a trial balance to not balance?

Recording a $500 debit as $5,000 in the ledger

Recording both the debit and credit sides of a transaction twice

Omitting a transaction entirely from the accounting records

Posting a transaction to the wrong account but with correct amounts

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Verified step by step guidance

Understand the purpose of a trial balance: A trial balance is prepared to ensure that the total debits equal the total credits in the ledger accounts. If there is an imbalance, it indicates an error in the accounting process.

Analyze the first option: Recording a $500 debit as $5,000 in the ledger would cause the trial balance to not balance because the debit side would be overstated by $4,500, creating an imbalance between debits and credits.

Analyze the second option: Recording both the debit and credit sides of a transaction twice would not cause the trial balance to not balance, as the error affects both sides equally, maintaining the balance.

Analyze the third option: Omitting a transaction entirely from the accounting records would not cause the trial balance to not balance, as neither the debit nor credit side is recorded, keeping the balance unaffected.

Analyze the fourth option: Posting a transaction to the wrong account but with correct amounts would not cause the trial balance to not balance, as the debit and credit amounts are still equal, even if posted to the wrong account.