If an accountant erroneously records an $8,000 credit to Accounts Payable instead of an $8,000 debit to the Cash account,the Accounts Payable account will be
A)understated by $8,000.
B)overstated by $8,000.
C)understated by $16,000.
D)overstated by $16,000.
E)correct since the erroneous entry caused the trial balance to equal.

Question

Quizplus · Accepted Answer

The erroneous credit entry to Accounts Payable increased the balance in the account, making it overstated by $8,000. If the correct debit entry had been made to Cash, the balance in that account would have decreased by $8,000, resulting in an accurate recording of the transaction. Therefore, the error caused the Accounts Payable account to be overstated by $8,000.

If an Accountant Erroneously Records an $8,000 Credit to Accounts