Question

An accountant is reviewing a trial balance. She knows the Accounts Receivable balance, on the Trial Balance, should be $350. However, the Trial Balance she is reviewing states the Accounts Receivable balance is $300. The balance is understated. Which of the following might be the cause of the error? Choose all that apply. Group of answer choices

1)The accountant created an invoice twice.

2)The accountant didn't create an Invoice that should have been created.

3)The accountant paid a bill twice.

4)The accountant created an invoice for the wrong amount.

Answer 1

The following choices can be selected;

2.The accountant didnt create an invoice that should have been created.

4.The accountant created an invoice for the wrong amount.

note;

The balance in accounts receivable will be lower than the correct amount when;

There is an omission in recording an amount.

There is under recording of an invoice.

If accountance paid a bill twice, it would have resulted in lower accounts payable.

Creating an invoice twice will result in higher amount of accounts receivable.