A Debit to a Liability Account Was Posted to an Expense

question 7

Multiple Choice

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

• A) assets to be overstated.
• B) liabilities to be understated.
• C) owner's equity to be overstated.
• D) expenses to be overstated.

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Definitions:

Common-Law Negligence

Refers to the failure to act with the level of care that someone of ordinary prudence would have exercised under the same circumstances, leading to unintended harm to others.

Legal Duty

Refers to an obligation imposed by law upon an individual to act or refrain from acting in a certain manner.

Proximately Caused

A legal principle that limits the damages a plaintiff can recover to those which are directly related to the defendant's actions.

Proximate Cause

A legal concept that links a defendant’s conduct with the plaintiff's injury or damage, establishing liability based on the foreseeability of the harm.