Embezzlers who manipulate accounting records to conceal their fraud (or theft of assets) most often ______________.
A) "Balance" the accounting equation by reducing equity.
B) "Balance" the accounting equation by reducing revenues.
C) "Balance" the accounting equation by reducing liabilities.
D) "Balance" the accounting equation by increasing expenses.

Question

Quizplus · Accepted Answer

A: Equity is normally only reduced through losses or dividends. the perpetrator will be caught when a miscellaneous transaction flows through.
B: Revenues normally increase. A decrease in a revenue account will send up many signals.
C: A liability normally involves a future transaction with an outside party. the perpetrator will be caught when the other party pays the bill or the company asks why they did not pay.

Embezzlers Who Manipulate Accounting Records to Conceal Their Fraud (Or