A Debit to an Asset Account Was Posted to an Expense

question 132

Multiple Choice

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

• A) liabilities to be overstated.
• B) expenses to be overstated.
• C) assets to be understated
• D) Both B and C are correct.

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Definitions:

Chargeout Rate

The rate at which a company bills its clients or internal departments for services provided, typically used in professional services firms.

Billable Hour

A unit of measure used to charge clients for services, representing one hour of work provided by a company or professional.

Accounting Standards

A set of principles and rules that define how financial transactions and statements should be recorded and reported.

Cost of Inventories

The total value of all the components that make up inventory, including materials, labor, and allocated overhead.