A Debit to an Expense Account Was Posted as a Debit

question 124

Multiple Choice

A debit to an expense account was posted as a debit to a revenue account. This error would cause:

• A) assets to be overstated.
• B) expenses to be overstated.
• C) revenue to be understated.
• D) None of the above is correct.

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Definitions:

Miller-Orr Model

A mathematical model used in finance to manage cash flow and determine the optimal level of cash balances for a firm.

BAT Model

A theoretical framework that outlines the potential consequences of Brexit across different sectors and regions.

Target Cash Balance

An optimal amount of cash that a company aims to hold to satisfy its operational and transactional requirements while minimizing holding costs.

Uncertainty

Refers to the degree of unpredictability or the lack of certainty about the future, often affecting decision-making in finance and economics.