The inclusion of invalid sales in the client's accounting records leads to an:
A) understatement of assets and overstatement of income.
B) overstatement of assets and understatement of income.
C) overstatement of assets and income.
D) understatement of assets and income.

Question

Quizplus · Accepted Answer

Including invalid sales inflates both the reported assets (accounts receivable) and income (revenue), leading to an overstatement of both.

The Inclusion of Invalid Sales in the Client's Accounting Records