Which of the following is an example of misappropriation of assets resulting in a misstatement in the balance sheet?
A) Cash from a cash sale was stolen and the transaction was not recorded.
B) Assets were stolen and the misappropriation was discovered.
C) Cash collected from a customer was stolen and the account receivable for the customer's account was not credited.
D) Both A and C

Question

Quizplus · Accepted Answer

Option A describes theft of cash and unrecorded transactions that would result in an understatement of assets on the balance sheet. Option C describes the theft of cash and failure to properly credit the corresponding account, resulting in an overstatement of accounts receivable and assets on the balance sheet. In both scenarios, misappropriation of assets has resulted in a misstatement of the balance sheet.

Which of the Following Is an Example of Misappropriation of Assets