How many accounts are affected in fraudulent accounting entries and therefore same number of categories on the financial statement?
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A. B. C. D.A
In general, fraudulent accounting entries are made with the intention to deceive or mislead the users of financial statements. Such entries can be made in a variety of ways, including falsifying transactions, manipulating accounts, or creating fictitious records. The effect of such entries is that they can impact the financial statements, potentially causing material misstatements.
In terms of the number of accounts affected by such fraudulent entries, the answer is typically at least two. This is because fraudulent accounting entries usually involve both a debit and a credit transaction that impact at least two accounts. For example, an employee might embezzle cash and then create a false entry to record the transaction as a payment to a legitimate vendor. This would result in a debit to the Cash account and a credit to the Accounts Payable account.
In some cases, fraudulent entries may only impact one account directly, but the effect on the financial statements would still be reflected in multiple categories. For example, a false entry to overstate inventory might only impact the Inventory account directly, but the overstatement would also impact Cost of Goods Sold and Gross Profit on the financial statements.
Therefore, the correct answer to the question is B. At least two accounts are affected by fraudulent accounting entries, and the same number of categories would be impacted on the financial statements.