1. A credit customer paid $850 toward his accounts receivable. The accountant recorded a credit to the revenue account. This error would cause __________.
A. revenue to be understated
B. cash to be overstated
C. accounts receivable to be overstated
D. liabilities to be understated
2. A credit to a liability account was posted to an expense account. This error would cause __________.
A. assets to be overstated
B. liabilities to be overstated
C. expenses to be overstated
D. None of the above answers are correct
3. A credit to an asset account was posted to a liability account. This error would cause __________.
A. assets to be understated
B. liabilities to be overstated
C. capital to be understated
D. None of the above answers are correct.
4. A debit to an expense account was posted to a revenue account. This error would cause
A. assets to be overstated
B. liabilities to be overstated
C. revenue to be understated
D. None of the above answers are correct.
5. A withdrawal by the owner was posted to an expense account. This error would cause
A. assets to be overstated
B. liabilities to be understated
C. withdrawals to be overstated
D. expenses to be overstated
6. A credit to an asset account was posted to a revenue account. This error would cause
A. assets to be overstated
B. revenue to be overstated
C. expenses to be overstated
D. Both A and C are correct.
7. A debit to an asset account was posted to a liability account. This error would cause
A. assets to be understated
B. liabilities to be overstated
C. capital to be overstated
D. None of the above answers are correct.
8. A debit to a liability account was posted to a revenue account. This error would cause
A. revenues to be understated
B. liabilities to be understated
C. capital to be overstated
D. None of the above answers are correct.
9. An account that would be increased by a debit is __________.
A. cash
B. fees earned
C. capital
D. accounts payable
10. A debit to an asset account was posted to an expense account. This error would cause
A. liabilities to be overstated
B. expenses to be overstated
C. assets to be understated
D. Both B and C are correct.
11. A compound transaction was recorded as follows: debit Equipment, $5,000; debit Cash, $1500; credit Accounts Payable, $3,500. This error would cause
A. assets to be overstated
B. assets to be understated
C. liabilities to be overstated
D. liabilities to be understated
12. A credit to a liability account was posted to an asset account. This error would cause
A. liabilities to be overstated
B. liabilities to be understated
C. revenues to be overstated
D. revenues to be understated
13. A credit to an asset account was posted to the capital account. This error would cause?
A. assets to be overstated
B. liabilities to be overstated
C. capital to be understated
D. Both A and C are correct.
14. A debit to a liability account was posted to a revenue account. This would cause
A. assets to be overstated
B. liabilities to be overstated
C. capital to be overstated
D. revenue to be overstated
15. A credit to an asset account was posted to a liability account. This would cause
A. assets to be understated
B. liabilities to be overstated
C. capital to be overstated
D. revenue to be overstated
16. A credit to an asset account was posted to a revenue account. This would cause
A. assets to be understated
B. liabilities to be understated
C. capital to be understated
D. revenue to be overstated
17. A debit to a liability account was posted to an expense account. This would cause
A. assets to be overstated
B. liabilities to be understated
C. owner’s equity to be overstated
D. expenses to be overstated
18. The journal entry to record a withdrawal by the owner would most commonly include __________.
A. a debit to Wage Expense and a credit to Cash
B. a debit to Capital and a credit to Cash
C. a debit to Withdrawals and a credit to Cash
D. a debit to Cash and a credit to Wage Expense
19. A debit to the capital account was posted to an expense account. This would cause
A. assets to be overstated
B. liabilities to be understated
C. capital to be overstated
D. expense to be understated
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