If a $200 debit to Interest Receivable was instead recorded as a $200 debit to Cash:
A)the trial balance would be out of balance by $200.
B)cash flows from investing activities would be overstated by $200.
C)cash flows from operating activities would be overstated by $200.
D)assets would be overstated by $200.

Question

Quizplus · Accepted Answer

A debit to cash instead of to interest receivable would not cause the trial balance to be out of balance. The debit to cash when cash was not received would overstate cash flows from operating activities. Debiting one asset instead of another would not affect overall assets.

If a $200 Debit to Interest Receivable Was Instead Recorded