The principal way to detect omitted credits from books of account is through:
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A. B. C. D.B
The correct answer to the question is A. Forced Balance.
Forced Balance is a technique used to detect fraud involving the omission of credits from the books of account. It involves comparing the total amount of cash received from external sources to the total amount of cash deposited in the bank. If there is a discrepancy between these two amounts, it indicates that some cash has been omitted from the books.
To perform a Forced Balance analysis, the investigator must first gather all relevant bank statements and deposit slips for the period under review. The investigator then adds up the total amount of cash received from all sources during this period. This includes cash sales, cash received from customers, and any other sources of cash.
Next, the investigator adds up the total amount of cash deposited in the bank during the same period. This includes all cash deposits, including deposits made by the business as well as deposits made by customers.
If the total amount of cash received is greater than the total amount of cash deposited, it indicates that some cash has been omitted from the books. The investigator can then begin to investigate further to determine the nature and extent of the fraud.
Trend analysis and expense account analysis are not relevant to detecting omitted credits. Trend analysis involves analyzing changes in financial data over time to identify patterns or anomalies, while expense account analysis involves reviewing the business's expense accounts to identify unusual or suspicious transactions.
In conclusion, the principal way to detect omitted credits from books of account is through Forced Balance analysis, which involves comparing the total amount of cash received to the total amount of cash deposited in the bank.