Which of the Following Misstatements Would Result in the Improper

question 88

Multiple Choice

Which of the following misstatements would result in the improper payment of cash or failure to receive cash not normally discovered as part of the audit of the bank reconciliation?

• A) payment to an employee for more hours than worked
• B) payment of raw materials that were not received
• C) duplicate payment of a vendor's invoice
• D) all of the above

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Definitions:

Net Method

An accounting method of recording purchases at the net of any trade discounts and rebates.

Purchase Discounts Lost

Occurs when a company fails to take advantage of early payment discounts offered by suppliers, leading to higher purchase costs.

Gross Method

The gross method in accounting is a way of recording purchases at the full invoice price without deduction of any cash discounts.

Accounts Payable

A current liability account on the balance sheet representing amounts owed by a company to suppliers or creditors for goods and services purchased on credit.