A credit to an asset account was posted to a liability account. This would cause:
A) assets to be overstated.
B) liabilities to be understated.
C) capital to be overstated.
D) revenue to be overstated.

Question

Quizplus · Accepted Answer

When a credit that should have been posted to an asset account is mistakenly posted to a liability account, it reduces the asset account balance (since it wasn't credited as it should have been) and increases the liability account balance (since it was credited in error). This error does not directly affect capital or revenue accounts.

A Credit to an Asset Account Was Posted to a Liability