A Credit to an Asset Account Was Posted to a Liability

question 110

Multiple Choice

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

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

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Definitions:

Legal Position

Refers to a party's rights, responsibilities, and standpoints under the law in a particular situation.

Injunction

A judicial command mandating that a person or organization start or stop a particular activity.

Mitigate Damages

Refers to the legal principle requiring a party to reduce their losses following a breach of contract.

Equitable Remedy

Judicial relief granted based on principles of fairness, including actions like injunctions and specific performance, as opposed to monetary damages.