A Credit to an Asset Account Was Posted to a Revenue

question 42

Multiple Choice

A credit to an asset account was posted to a revenue account. This would cause

• A) assets to be understated.
• B) liabilities to be understated.
• C) capital to be understated.
• D) revenue to be overstated

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Definitions:

Allocation Bases

Criteria or bases used to distribute costs among different departments, products, or activities in a fair and efficient manner.

Salaries

Regular payments made by an employer to an employee, usually on a monthly or biweekly basis, in exchange for work performed.

Administration Expenses

Expenses related to the general operation of a business that are not directly tied to the production or sale of goods or services, such as office supplies and salaries of administrative personnel.

Square Footage

A measurement of area used to determine the size of a space, often utilized in real estate to measure the size of buildings or rooms.