Asked by Thamizh Ezhilnambi on Jun 24, 2024
Verified
A $15 credit to Sales was posted as a $150 credit.By what amount is the Sales account in error?
A) $150 understated.
B) $135 overstated.
C) $150 overstated.
D) $15 understated.
E) $135 understated.
Sales Account
An account used to record the revenue from sales of goods or services by a company during a specific period.
Credit
A journal entry that results in an increase in a liability or equity account or a reduction in an asset or expense account.
Overstated
Describing financial statements or figures that have been reported at a value higher than the true or fair value.
- Discern common faults in ledger entries and their impact on financial documentation.
Verified Answer
RP
Regina PellegrinoJun 26, 2024
Final Answer :
B
Explanation :
The Sales account is overstated because the credit was posted as $150 instead of the correct amount of $15, making it overstated by the difference of $135.
Learning Objectives
- Discern common faults in ledger entries and their impact on financial documentation.