The chapter mentioned that one problem that perpetrators of fraud have is that, when they inflate income, they must also misstate some other account so that the accounting equation will balance. In one real fraud, the company used all of the following methods to try to conceal a large overstatement of income. For each of the following, indicate how the fraud might be discovered:

A. The company claimed to have a large amount of inventory in Malaysia. In fact, the inventory did not exist.

B. The company claims to have made sales, on account, to certain customers. In fact, the accounts receivable are fictitious.

C. The company owed $20 million to two suppliers. It left these payables off its list of accounts payable.

D. The company claimed to have prepaid taxes of $12 million.