A $6,440 debit to interest expense was incorrectly posted as a $644 debit. What is the effect 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 understated by $5,796.
D) The debit column of the trial balance would be $5,796 understated and interest expense would be overstated 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 correct posting should have been $6,440, but only $644 was posted, resulting in a $5,796 shortfall. This means both the debit column of the trial balance and the interest expense account are understated by $5,796.

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