A credit to an asset account was posted 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 are correct.

Question

Quizplus · Accepted Answer

Posting a credit to an asset account to a liability account would cause liabilities to be overstated because a credit to an asset account represents an increase in assets, but when posted to a liability account it falsely increases the liability amount.

A Credit to an Asset Account Was Posted to a Liability