The Accounts Receivable Clerk Destroys All Invoices for Sales Made

question 28

Multiple Choice

The accounts receivable clerk destroys all invoices for sales made to members of her family and does not record the sale in the accounts receivable subsidiary ledger.Which procedure will not detect this fraud?

• A)prenumber and sequence check all invoices
• B)reconcile the accounts receivable control to the accounts receivable subsidiary ledger
• C)prepare monthly customer statements
• D)reconcile total sales on account to the debits in the accounts receivable subsidiary ledger

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Definitions:

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained.

Invisible Hand

A metaphor coined by Adam Smith to describe the self-regulating nature of the market, where individuals pursuing their own interests inadvertently benefit society as a whole.

Competitive Market

A market structure characterized by a large number of buyers and sellers where no single party can dictate the market price of goods or services.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often a measure of producer wellbeing.