A debit to a revenue account was posted to an expense account. This would cause __________.
A. expenses to be overstated
B. revenue to be understated
C. expenses to be understated
D. capital to be overstated
i believe its C
To determine the correct answer, let's break down the scenario:
In accounting, revenue accounts typically represent income or revenue earned by a company, while expense accounts represent costs incurred.
If a debit (which is an increase) to a revenue account was mistakenly posted to an expense account, it would lead to an incorrect recording of the transaction.
The expense account would be overstated (since it was incorrectly credited with more expenses), while the revenue account would be understated (since it was mistakenly debited with less revenue).
Therefore, the correct answer is: B. revenue to be understated.