Overstated, Understated...

[aposta28]

Hey guys,
For some reason i have not been able to grasp this concept.
In this practice sac, there was a payment of $100 interest was incorrectly recorded as a loan repayment.

State the effect on each element of the Accounting equation if the error in this transaction if it is not corrected.
If someone doesn't mind go through it, because i am having trouble with these questions

Thanks guys

[naved_s9994]

Classify each of them, and then go from there.. Interest is an expense... then you think how/if? it affects assets/liab/OE.

In a rush, cant answer it completely.

[nbalakers24]

Assets - no effect
Liabilities - understated because the interest is recorded as a loan repayment which decreases the principal amount
OE - overstated because of the understatement of the loan
Revenue - no effect
Expenses - understated because interest expense is not recorded

[davyp3]

Assets - no effect
Liabilities - understated because the interest is recorded as a loan repayment which decreases the principal amount
OE - overstated because of the understatement of the loan
Revenue - no effect
Expenses - understated because interest expense is not recorded

to go on further, it may be beneficial to add the fact

Net Profit Overstated and O.E Overstated