Question

How does one commit accounts receivable fraud?

A) submit a fake invoice and pocket the money

B) bill customers for the amount they purchased, but record lower purchases in the ledger and pocket the money

C) create a ghost employee to defraud a payroll

D) order unneeded inventory, which gets subsequently stolen and used or sold

Answer 1

The answer is B) bill customers for the amount they purchased, but record lower purchases in the ledger and pocket the money. A fraud is one of two types of mistake in the recording process which done with a deliberate intention. The account receivable department responsible for recording sales transaction and billing the customers. Thus, the account receivable fraud can be committed in this process.

Answer 2

Answer:

Bill customers for the amount they purchased but record lower purchases in the ledger and pocket the money ( B )

Explanation:

Accounts receivable Fraud is an intentional act of stealing/diverting company or business funds made from the sales of goods and services made by the company. the staffs mostly responsible for this kind of Fraud is usually the cashiers or account clerks.

The duties of the cashiers or account clerks is to record transactions whether cash or card transactions made by the business/company in the company ledger. the most vulnerable of this kind of payments are cash receipt payments because the cashier might issue a receipt not equivalent to what is entered in the ledger book.