Which of the following would be consistent with an employee taking cash receipts from customers on account?
A)The total of the accounts receivable subsidiary ledger balances is less than the accounts receivable control account.
B)The total of the accounts receivable subsidiary ledger balances is greater than the accounts receivable control account.
C)Total cash receipts from customers for the month are less than credit sales for the month.
D)Total cash receipts from customers for the month are greater than credit sales for the month.

Question

Quizplus · Accepted Answer

When an employee takes cash receipts from customers on account, it would not be recorded, leading to the accounts receivable control account (which is supposed to decrease with cash receipts) being higher than the total of the individual accounts in the subsidiary ledger. This discrepancy occurs because the control account reflects expected reductions from payments that are not matched in the subsidiary ledger due to the theft.

Which of the Following Would Be Consistent with an Employee