Equality of the accounting equation

Reference no: EM13762064

Assume that Larsh Realty Inc. borrowed $75,000 from Country Bank and Trust. In recording the transaction, Larsh erroneously recorded the receipt as an increase in cash, $75,000, and an increase in fees earned, $75,000.

(a) How would this error affect the equality of the accounting equation?

(b) How would this error affect the income statement, retained earnings statement, balance sheet, the statement of cash flows?

Reference no: EM13762064

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