What Type of Error Is the CPA Most Likely to Discover

question 32

Multiple Choice

What type of error is the CPA most likely to discover when he/she examines all shipping reports dated in January of 20X1, shipped FOB shipping point, which were recorded in December of 20X0 as credit sales?

• A) Accounts receivable are overstated at December 31, 20X0.
• B) Accounts receivable are understated at December 31, 20X0.
• C) Operating expenses are overstated for the 12 months ended December 31, 20X0.
• D) Sales returns and allowance are overstated at December 31, 20X0.

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Definitions:

Unconditioned

In behavioral psychology, refers to stimuli or responses that are natural and do not require learning to manifest.

Conditioned

The process by which an individual's behavioral response is learned or modified through experience or training.

Learned

Acquired knowledge or skills through experience, study, or being taught.

Habituation

Habituation is the psychological process in which there is a decrease in response to a repeated stimulus over time.