The purchase of equipment with both cash and on account was recorded as only a credit purchase.Due to this error:
A)assets would be understated.
B)liabilities would be overstated.
C)owner's equity would be overstated.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The error would result in an overstatement of liabilities, as the equipment bought on account was not properly recorded as a liability. This means that the balance sheet would show a higher amount of liabilities and a lower amount of assets than the actual situation.

The Purchase of Equipment with Both Cash and on Account