A Credit to an Asset Account Was Posted to a Liability

question 62

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 understated.
• D) revenue to be overstated.

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Definitions:

Stable Supply Curve

A situation in which the supply curve remains unchanged over time, indicating that the quantity supplied is not affected by changes in price.

Increasing Demand

A situation where the quantity of a good or service that consumers are willing and able to buy increases, often due to factors like rising incomes, changes in tastes, or lower prices of the product.

Allocative Efficiency

A state of resource allocation where it is impossible to make any one individual better off without making at least one individual worse off.

Productive Efficiency

A condition in which an economy or entity is utilizing all its resources efficiently, producing maximum output for a given set of inputs without waste.