Positive Accounts Receivable Confirmations Were Circularized,and There Were Many Differences

question 63

Multiple Choice

Positive accounts receivable confirmations were circularized,and there were many differences where the client stated that the goods had not been received as of the date of the confirmation.In addition to the possibility that the goods were not received by the client,this type of reported difference could be an indication of

• A)a cutoff misstatement.
• B)timing differences with respect to recording sales returns.
• C)improper recording of sales allowances.
• D)theft of cash or lapping.

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Definitions:

Lawful

Conforming to, permitted by, or recognized by law and regulations.

Sherman Act

A landmark federal statute in the United States antitrust law passed by Congress in 1890 that prohibits monopolistic practices and promotes competition.

Market Power

Refers to the ability of a company or entity to influence the price and output levels in a market.

Competitors Cooperate

A situation where businesses that usually compete against each other decide to work together towards a common goal or project.