If a $200 credit to Interest Payable was instead recorded in error as a $200 credit to Cash:
A)the trial balance would be out of balance by $200.
B)cash flows from operating activities would be understated by $200.
C)cash flows from investing activities would be understated by $200.
D)liabilities would be overstated by $200.

Question

Quizplus · Accepted Answer

The error would result in cash being understated by $200, which would cause cash flows from operating activities to be understated by the same amount.

If a $200 Credit to Interest Payable Was Instead Recorded