Cash Receipts from Sales on Account Have Been Misappropriated

question 117

Multiple Choice

Cash receipts from sales on account have been misappropriated. Which of the following acts would conceal this fraud and be least likely to be detected by an auditor?

• A) understating the sales journal by not recording cash sales
• B) overstating the accounts receivable control account by intentionally misstating prices charged for goods sold
• C) overstating the accounts receivable subsidiary ledger by not recording payments made by customers
• D) understating the cash receipts journal by purposely recording incorrect amounts

---

Definitions:

Bowman Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney, playing a crucial role in the filtration of blood to form urine.

Filtration Slits

are gaps between the podocyte processes in the kidneys through which blood filtration occurs.

Capillary Pores

Capillary pores refer to tiny openings in the surface of materials or biological tissues that facilitate the movement of fluids through capillary action.

Capsular Hydrostatic Pressure

The pressure within the capsule of a joint or within the Bowman's capsule in the kidneys, influencing filtration rates.