The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies. This would cause:

Question

Quizplus · Accepted Answer

Debiting Equipment instead of Supplies for the purchase of supplies means that the Supplies account is not increased to reflect the purchase, making Supplies understated. The error does not affect the Petty Cash balance directly, nor does it cause Equipment to be understated; it would actually be overstated if anything.

The Entry to Replenish the Petty Cash Fund Included a Debit