A business with cash transactions may choose not to record the cash sales to understate revenue. Why would a business want to understate revenue?
A) To decrease tax liabilities
B) To decrease inflate stock prices
C) To hide problems
D) To meet the terms of loan covenants

Question

Quizplus · Accepted Answer

Understating revenue can decrease taxable income, thereby reducing the business's tax liabilities.

A Business with Cash Transactions May Choose Not to Record