Your Client Left the Cash Receipts Journal Open After Year-End

question 9

Multiple Choice

Your client left the cash receipts journal open after year-end for an extra day and included January 1 cash receipts in the 12/31/XX totals.All of those cash receipts were due to cash sales.Assuming the client uses a periodic inventory system with a 12/31/XX count of the physical inventory,which of the following is most likely to be true relating to the year XX financial statements?

• A)Sales are understated.
• B)Accounts receivable are understated.
• C)Inventory is overstated.
• D)Net income is overstated.

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