A debit to a liability account was posted to the Capital account. This error would cause
A) assets to be overstated.
B) liabilities to be overstated.
C) Capital to be overstated.
D) None of the above are correct.

Question

Quizplus · Accepted Answer

Liabilities would be overstated because the debit that should have reduced the liability was incorrectly posted to the Capital account, leaving the liability account higher than it should be.

A Debit to a Liability Account Was Posted to the Capital