Which of the following is an example of misappropriation of assets resulting in a misstatement in the balance sheet?
A) Cash from a cash sale was stolen, and the transaction was not recorded.
B) Assets were stolen, and the misappropriation was discovered.
C) Cash collected from a customer was stolen, and the account receivable for the customer's account was not credited.
D) both A and C

Question

Quizplus · Accepted Answer

Option A describes theft of cash which leads to understatement of cash balance in the balance sheet. Option C describes theft of cash collected from a customer, which leads to overstatement of accounts receivable balance in the balance sheet. Both options A and C involve misappropriation of assets resulting in misstatement in the balance sheet. Hence, the correct answer is D.

Which of the Following Is an Example of Misappropriation of Assets