A Credit to a Liability Account Was Posted as a Credit

question 57

Multiple Choice

A credit to a liability account was posted as a credit to an expense account. This error would cause:

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

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Definitions:

Contractual Relationship

An agreement between entities, enforced by law, that outlines obligations and benefits for each party.

Personal Services

Services offered by individuals or companies that provide personalized expertise or efforts, often involving intellectual or manual personal skills.

Conflict of Interest

A situation in which a person's or entity's personal interest interferes with their ability to make impartial decisions.

Consortium

A group of companies or organizations that join together for a common purpose, often to undertake a substantial project beyond the resources of any single member.