A credit to an asset account was posted as a credit to a liability account. This error would cause:
A) assets to be understated.
B) liabilities to be overstated.
C) capital to be understated.
D) None of the above is correct.

Question

Quizplus · Accepted Answer

When a credit that should have gone to an asset account is mistakenly posted to a liability account, it increases the liability account. Since the asset account did not receive the credit it should have, liabilities are overstated as a result of the error.

A Credit to an Asset Account Was Posted as a Credit