The accountant at Fog Company recorded the purchase of $600 of supplies for cash as a debit to Supplies for $600 and a credit to Accounts Payable for $600.
Determine the effect of this error on the accounting equation of Fog Company.
A) Total Equity would be overstated by $600
B) Total Liabilities will be understated by $600
C) Total Assets would be overstated by $600
D) Total Equity would be understated by $600

Question

Quizplus · Accepted Answer

11ee7640_e202_73e4_90da_c3bbedac8e7e_TBCB1007_00 Both Assets and Liabilities are overstated.

The Accountant at Fog Company Recorded the Purchase of $600