Which of the Following Manipulations Would Understate Receivables on the Financial

question 10

Multiple Choice

Which of the following manipulations would understate receivables on the financial statements?

• A)Understatement of cash sales.
• B)Closing the sales journal prior to year-end.
• C)Closing the cash receipts journal prior to year-end.
• D)Underestimating the allowance for doubtful accounts.

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Definitions:

Direct Costs

Costs that can be traced directly to the production of specific goods or services, such as raw materials and labor.

Direct Manufacturing Cost

Expenses directly associated with the production of goods, including labor and materials.

Units Produced

The aggregate count of finished products produced over a designated time frame.

Direct Manufacturing Cost

Expenses directly associated with the production of goods, including raw materials and direct labor costs.