In reviewing the accounts of Tumblers Co., you discovered that a credit of $1,000 to prepaid insurance was wrongly credited to accounts receivable, and an $800prepayment was remitted for a radio advertisement that was not posted. Which of the following statements reflects the effect of the errors?
A)Total assets is overstated by $500 and owner's equity is overstated by $500.
B)There is no overstatement or understatement in the total assets and the owner's equity.
C)Total assets is understated by $1,800 and owner's equity is understated by $1000.
D)Total assets is understated by $200 and owner's equity is understated by $200.
E)Total assets is overstated by $300 and owner's equity is overstated by $300.

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The Answer of In reviewing the accounts of Tumblers Co., you discovered that a credit of $1,000 to prepaid insurance was wrongly credited to accounts receivable, and an $800prepayment was remitted for a radio advertisement that was not posted. Which of the following statements reflects the effect of the errors?
A)Total assets is overstated by $500 and owner's equity is overstated by $500.
B)There is no overstatement or understatement in the total assets and the owner's equity.
C)Total assets is understated by $1,800 and owner's equity is understated by $1000.
D)Total assets is understated by $200 and owner's equity is understated by $200.
E)Total assets is overstated by $300 and owner's equity is overstated by $300.

In Reviewing the Accounts of Tumblers Co