If fictitious sales were recorded and the fictitious accounts receivable were written off as bad debt expense,________.
A)income would be overstated
B)income would be understated
C)income would not be misstated
D)accounts receivable would be understated

Question

Quizplus · Accepted Answer

Recording fictitious sales initially overstates income, but writing off the fictitious accounts receivable as bad debt expense reverses the effect, resulting in no net misstatement of income.

If Fictitious Sales Were Recorded and the Fictitious Accounts Receivable