A debit to a liability account was posted as a debit to a revenue account.This error would cause:
A)revenues to be understated.
B)liabilities to be understated.
C)revenue to be overstated.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The error would cause revenues to be understated because the debit entry, which should have reduced a liability, was incorrectly posted to reduce revenue instead.

A Debit to a Liability Account Was Posted as a Debit