Which type of account would most likely be used to conceal fraud?
A) Common Stock
B) Revenues
C) Liabilities
D) Expenses

Question

Quizplus · Accepted Answer

A: It is an account without a lot of transactions, so embezzlers stay away from this and other equity accounts
B: Revenue does have adjustments, but they would need to be up and would quickly draw attention
C: Embezzlers steal assets, not liabilities and decreasing liabilities is not a good way to conceal-it can be easily discovered
D: In order to balance the accounting equation after stealing assets, this is the best way to do it, especially since expenses are closed out and rolled into retained earnings at the end of the year

Which Type of Account Would Most Likely Be Used to Conceal