Question

Pixel Copies recorded a cash collection on account by debiting Cash and crediting Accounts Payable. What will the trial balance show for this​ error? A. The trial balance will not balance B. Expenses are overstated C. Liabilities are overstated D. Cash is overstated

Answer 1

Answer:

Option C Liabilities are overstated

Explanation:

Option A is incorrect because the double entry posted is equal in credit and debit so the the equation will hold true.

Option B is also incorrect because the double entry does not includes the expense account then how it is overstated.

Option C is correct because the entry has overstated the payables by incorrectly crediting the account payables instead of trade receivables.

Option D is also incorrect because the entry passed in the cash account is correct because when cash is received it is always debited so it is not overstated.