A $6,440 debit to interest expense was incorrectly posted as a $644 debit. What is theeffect of this error on the trial balance and the interest expense accounts?
A)The debit column of the trial balance would be $5,796 overstated and interest expense would be understated by $5,796.
B)The debit column of the trial balance would be $5,796 overstated and interest expense would be overstated by $5,796.
C)The debit column of the trial balance would be $5,796 understated and interest expense would be overstated by $5,796.
D)The debit column of the trial balance would be $5,796 understated and interest expense would be understated by $5,796.
E)The debit column of the trial balance would be $6,440 understated and interest expense would be understated by $6,440.

Question

Quizplus · Accepted Answer

The error caused the interest expense to be recorded as $644 instead of $6,440, leading to an understatement of $5,796 ($6,440 - $644) in both the trial balance's debit column and the interest expense account.

A $6,440 Debit to Interest Expense Was Incorrectly Posted as a $644