A Receipt of $12,600 Cash from a Customer as a Payment

question 53

Multiple Choice

A receipt of $12,600 cash from a customer as a payment on their account wasincorrectly credited to Rent Revenue. What is the effect of this error on the financial statements of the company?

• A)Assets are overstated by $25,200 and owners' equity is overstated by $25,200.
• B)Assets are overstated by $12,600 and owners' equity is overstated by $12,600.
• C)Assets are understated by $12,600 and liabilities are understated by $12,600.
• D)Assets are understated by $25,200 and owners' equity is understated by $25,200.
• E)Assets are understated by $12,600 and owners' equity is understated by $12,600.

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Definitions:

Clock Speed

The rate at which timing signals are sent to motherboard components (normally measured in MHz).

Single-Threaded Task

A single-threaded task is executed by a computer processor using a single sequence of instructions, meaning tasks are completed one at a time.

IPS

In-Plane Switching, a technology for LCD displays that offers wider viewing angles and better color accuracy, or Intrusion Prevention System, designed to detect and prevent network breaches.