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.

---

Definitions:

Value-Based Pricing

A pricing strategy where the price is set based on the perceived value to the customer rather than the cost of the product or market prices.

Differentiation Value

The unique attributes or benefits that make a product or service stand out from competitors, enhancing its market appeal.

Useful Life

The estimated period over which a fixed asset is expected to be usable by the organization, impacting its depreciation calculation.

Operating Costs

The ongoing expenses related to running a business, excluding the cost of goods sold, such as rent, utilities, and payroll.