On December 31,2012,the Adjusting Entry for Depreciation Was Made Incorrectly

question 74

Multiple Choice

On December 31,2012,the adjusting entry for depreciation was made incorrectly.The following is the entry which was made erroneously: $$\begin{array} { | l | r | r | } \hline \text { Depreciation expense } & 1,500 & \\\hline \text { Accumulated depreciation } & & 1,500 \\\hline\end{array}$$ The correct amount of depreciation should have been $5,100.Consider the effects of this error on the balance sheet,and identify which of the following statements is TRUE.

• A) Total liabilities are overstated by $3,600.
• B) Total liabilities are understated by $3,600.
• C) Total assets are overstated by $3,600.
• D) Total assets are understated by $3,600.

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