Question

A credit balance in which of the following accounts would dictate a likely error?

A. accounts payable
B. fees earned
C. common stock
D. salary expense

Answer 1

A credit balance in the accounts payable account would dictate a likely error.

Step-by-step explanation:

A credit balance in the accounts payable account would dictate a likely error.

Accounts payable is a liability account that represents the amount owed by a company to its suppliers or vendors for goods or services received on credit. In a correct financial record, accounts payable should have a debit balance because it represents an obligation to pay.

An error in recording transactions could result in a credit balance in the accounts payable account, which would indicate that the company owes less than it actually does. This error can lead to incorrect financial statements and misrepresentation of the company's financial position.