Question

A compound transaction was recorded as follows: debit Equipment, $5,000; debit Cash, $1500; credit Accounts Payable, $3,500. This error would cause __________.

Answer 1

The trial balance would disagree. It seems that the cash should be credited instead as the situation seems to me that the cash is being expended to pay for the equipment, and the remaining 3500 is liabilities. Therefore, the error should be corrected.