Which of the Following Statements About Accounting Systems Is Incorrect

question 27

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 almost always 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:

Sales Transactions

The process of exchanging a product or service for payment, constituting the primary revenue-generating activities of a business.

Recognizing Receivable

The accounting process of recording revenue when earned and receivables that are expected to be collected, regardless of cash receipt.

Allowance Account

An account used to record reductions in the book value of accounts receivable due to potential future defaults on payments.

Doubtful Accounts

Doubtful accounts represent receivables that a company is uncertain to collect, typically categorized separately to reflect potential losses.