Question

A client might overstate December 31 accounts receivable balances by dating and recording January transactions in December. Such entries recorded in which journal are most likely to achieve this end?A. Cash receipts.B. Payroll.C. Purchases.D. Sales.

Answer 1

D. Sales.

Step-by-step explanation:

Account receivable: Account receivable is that account in which the goods and services are given on a credit basis not on credit basis by the company to the customers. It is shown under the balance sheet in the current asset side.

Since the client may have overstated account receivable balance. So, this will entry would be recorded in the sales journal As, the credit sales are made, so, it is recorded in the sales journal only. No other journals would be used