In: Accounting
Which of the following errors would cause the trial balance to be out of balance?
A.The payment of an account payable for $200 was recorded as a debit to Accounts Payable for $200 and a credit to Cash for $2,000.
B.The payment of an account payable for$400 was recorded as a debit to Cash, $400,and a credit to Accounts Payable, $400.
C.The payment of utilities expense was recorded as a debit to Rent Expense for $77and a credit to Cash for $77.
D.The collection of an account was not recorded.
Error that would cause the Trial Balnce to be Out of Balance:
A. The payment of an account payable for $200 was recorded as debit to Accounts Payable for $200 and a credit to Cash for $2,000.
The payment of an account payable for $200 should be recorded as debit to Accounts Payable for $200 and a credit to Cash for $200. Here, Cash is credited for $2,000 instead of $200, resulting in excess credit to Cash by $1,800. Thus, Trial Balance would be Out of Balance.
Explanation for Other Choices:
B. The payment of an account payable for $400 was recorded as a debit to Cash, $400 and a credit to Accounts Payable, $400.
The payment of an account payable for $400 should be recorded as debit to Accounts Payable, $400 and a credit to Cash, $400. The Trial Balance will be Balanced even after this error.
Because, Both Assets and Liability Accounts (Cash and Accounts Payable) are overstated (Increased) by the exact amount.
C. The payment of utilities expenses was recorded as a debit to Rent Expense for $77 and a credit to Cash for $77.
The payment of utilities expenses should be recorded as debit to Utilities Expense for $77 and a credit to Cash for $77. The Trial Balance will be Balanced even after this error.
Because, wrong debit is given to another expense account only by the exact amount of credit to asset account.
D. The collection of an account was not recorded.
The collection of an account should be recorded as debit to Cash and credit to Accounts Receivables.
Since, both the debit and credit effects are missing, Trial Balance will be Balanced even after this error.