Which of the Following Statements About Accounting Systems Is Incorrect

question 7

Multiple Choice

Which of the following statements about accounting systems is incorrect?

• A)An effective accounting system provides an audit trail that allows frauds to be discovered.
• B)An effective accounting system makes concealment difficult.
• C)An effective accounting system can effectively prevent "kickbacks."
• D)Without a good accounting system, it is often difficult to distinguish between actual fraud and unintentional error.

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Definitions:

Payee

The party in a financial transaction to whom money is paid or is to be paid.

Interest Income

Earnings received from deposit accounts or investments that yield interest, such as savings accounts, bonds, or loans.

Accounts Receivable

An asset account that records amounts a company has a right to receive because it has provided goods or services on credit.

Nontrade Receivables

Amounts owed to a company that are not related to the sale of goods or services, such as tax refunds or loans to employees.