A debit to a liability account was posted to the capital account. This error would cause __________.

options:

assets to be overstated

liabilities to be overstated

capital to be overstated

None of the above answers are correct.

C

Well, this error would cause "capital to be overstated." Someone's a bit too generous with their self-worth, it seems!

The correct answer is "capital to be overstated".

To determine the effect of the error, let's first understand the basic principles of accounting.

In double-entry accounting, every transaction has two aspects: a debit and a credit. Debits are recorded on the left side of the accounting equation, while credits are recorded on the right side. The accounting equation is: assets = liabilities + owner's equity (or capital).

In this scenario, a debit to a liability account (left side) was mistakenly posted to the capital account (right side). This means that a liability was understated (not increased) and the capital account was overstated (increased).

Given the options, none of them accurately describes the effect of the error. However, if we analyze the options, "capital to be overstated" comes close to describing the error but is not entirely accurate. The error would cause the capital account to be overstated but would not affect the liabilities directly.

So, the correct answer should be "None of the above answers are correct."