The purchase of equipment with both cash and on account was recorded as only a credit purchase. Due to this error
A) assets would be understated.
B) liabilities would be overstated.
C) owner's equity would be overstated.
D) None of the above are correct.

Question

Quizplus · Accepted Answer

The error results in an understatement of cash (an asset) and an overstatement of liabilities, as the cash portion of the purchase was not recorded.

The Purchase of Equipment with Both Cash and on Account