Which of the Following Relatively Small Misstatements Most Likely Would

question 27

Multiple Choice

Which of the following relatively small misstatements most likely would have a material effect on an entity's financial statements?

• A)An illegal payment to a foreign official that was not recorded.
• B)A piece of obsolete office equipment that was not retired.
• C)A petty cash fund disbursement that was not properly authorized.
• D)An uncollectible account receivable that was not written off.

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Definitions:

Leveraged Buyouts

A financial transaction where a company is purchased primarily with borrowed funds, often by taking out loans or by issuing bonds.

Conglomerate Acquisitions

The purchase of companies in different industries by a single corporate conglomerate, aiming to diversify business operations and minimize risks.

Synergistic Increases

The potential financial benefit achieved through the combining of companies, resulting in improved efficiency and savings.

Accounting

The systematic process of recording, analyzing, and reporting financial transactions of a business.