How would error affect equality of the accounting equation

Reference no: EM13899869

Assume that Kilgore Realty, Inc., borrowed $80,000 from First City Bank and Trust. In recording the transaction, Kilgore erroneously recorded the receipt of $80,000 as an increase in cash, $80,000, and an increase in fees earned, $80,000.

(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, and statement of cash flows?

Reference no: EM13899869

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