A debit to a Liability account was posted as a debit to an Asset account. This error would cause:
A) Asset to be understated.
B) Liabilities to be understated.
C) Asset to be overstated.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

When a debit that should have gone to a Liability account is instead posted to an Asset account, it increases the Asset account balance erroneously, leading to an overstatement of assets.

A Debit to a Liability Account Was Posted as a Debit