Which of the following would a company be most likely to overstate if the company was trying to mislead potential external investors or creditors?
A)Accounts Receivable
B)Notes Payable
C)Salaries Expense
D)Accounts Payable

Question

Quizplus · Accepted Answer

A company would be most likely to overstate its accounts receivable if it was trying to mislead potential external investors or creditors. This is because inflating the amount of money that is owed to the company by customers would make the company appear more financially stable than it actually is. On the other hand, overstating notes payable, salaries expense, or accounts payable would not have the same effect and may actually make the company appear less financially stable.

Which of the Following Would a Company Be Most Likely