If a partner's current account shows a credit balance and it is presented on the assets side of the balance sheet, what type of error has occurred?

Correct answer: Payable balance shown as an asset

A credit balance in a partner's current account means the firm owes the partner—so it is a liability. Presenting that credit balance on the assets side misclassifies a liability as an asset, so option A is correct. Option B describes the opposite mistake (a receivable shown as a liability), which is not the error stated. Exam tip: Always check whether the current account is debit or credit — credit balance → liability/payable; debit balance → asset/receivable.