Question

Overstating cash is usually difficult because:

a) cash balances can be easily confirmed with banks and other financial institutions
b) cash is hard to steal
c) cash is normally not a fraudulent account
d) cash is usually a small asset

Answer 1

Overstating cash is difficult because it can be confirmed with banks and financial institutions, and cash is typically not a fraudulent account.

Step-by-step explanation:

Overstating cash is usually difficult because:

1. cash balances can be easily confirmed with banks and other financial institutions
2. cash is typically not a fraudulent account

Cash is a highly liquid asset that can be easily verified by reconciling bank statements and conducting regular cash counts. Financial institutions provide statements to account holders, allowing them to compare their recorded cash balance with the bank's records. Additionally, cash is not usually a fraudulent account as it represents the actual funds held by the business or individual.