Cash receipts from sales on account have been misappropriated. Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?
A)Understating the sales journal.
B)Overstating the accounts receivable control account.
C)Overstating the accounts receivable subsidiary ledger.
D)Understating the cash receipts journal.

Question

Quizplus · Accepted Answer

Understating the sales journal would conceal the defalcation by making it appear as though fewer sales occurred, thus aligning with the reduced cash receipts, and it would be less likely to be detected because it doesn't directly affect the accounts receivable records.

Cash Receipts from Sales on Account Have Been Misappropriated