Assume that Bell Tower Realty Inc. borrowed $90,000 from First Bank and Trust. In recording the transaction, Bell Tower erroneously recorded the receipt as an increase in cash, $90,000, and an increase in fees earned, $90,000.
(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?