QUESTION 8

Baker works in the sales department of ABC Company, which manufactures computer chips. Baker creates false documentation indicating that XYZ Inc. (A nonexistent company) has agreed to purchase a large quantity of computer chips. No credit check is done for XYZ Inc. The computer chips are shipped to XYZ inc. Headquarters, which is really Bakers house. Which of the following is not one of the red flags that might occur as a result of this scheme?

		The customer has the same address as employee Baker.
		Since the customer does not exist, no credit check could have been done on XYZ prior to the issuance of this sale on credit.
		XYZs account will age and eventually have to be written off as uncollectible.
		The sale is recorded in the sales register as a debit to accounts receivable and a credit to sales.