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

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15 December, 13:42

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

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Sammy Webster · Answer 1

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.