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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. Cash is overstated B. Expenses are overstated C. The trial balance will not balance D. Liabilities are overstated

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Answer:

D. Liabilities are overstated

Explanation:

The given journal entry is

Cash A/c Dr XXXXX

    To Account payable A/c XXXXX

(Being the cash collection is recorded)

This above journal entry is wrong.

The correct journal entry is as follows:

Cash A/c Dr XXXXX

    To Account receivable  A/c XXXXX

(Being the cash collection is recorded)

For rectifying this error, either we reverse the given entry and pass the correct journal entry that is shown above or pass the entry that is given below:

Account payable A/c Dr XXXXX

      To Account receivable  A/c XXXXX

So,  we can see the liabilities accounts are overstated due to this error

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