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:

Religious Freedoms

The right to practice and express one's religion without government interference, a fundamental principle protected in many countries around the world, including the United States.

Tobacco Industry

The sector of the economy involved in the production, marketing, and sale of tobacco and tobacco-related products.

Indentured Servitude

A labor system where individuals worked for a specific period of time to pay off a debt, such as passage to the New World, without receiving wages.