A Debit to an Expense Account Was Posted to an Asset

question 116

Multiple Choice

A debit to an expense account was posted to an asset account. This would cause

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

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Definitions:

Intangible Benefits

Benefits that cannot be easily quantified or directly measured, such as brand recognition or employee satisfaction.

Discount Rate

The rate at which future cash flows are discounted to determine their current value.

Salvage Value

The calculated final value of an asset at the conclusion of its operational period.

Simple Rate of Return

A metric that calculates the percentage of profit or loss on an investment relative to its initial cost.