This question covers a potential fraud. 1) What would happen if a business moved sales between years? 2) What would be the effect moving sales between years in a) Net Income on the Income Statement b) Equity on the Balance Sheet? In your answer, please discuss How financial statements, both Balance Sheet and Income Statement, are effected. Go over the journal entries in this chapters to think about the impact. First, remember that the Balance Sheet is Assets Liabilities + Equity. The Income Statement is Revenues - Expenses = Net Income. And remember that Net Income flows to the Statement of Owner's Equity, which then flows to the Balance Sheet (which means net income impacts equity). Also remember (from doing bank reconciliations) that the cash at the end of the year doesn't change - you have what you have in that account after you reconcile your bank account(s). Here are the journal entries. The accounts reflected are on either the income statement or the balance sheet. Account Debit Accounts Receivable or Cash X Sales (Sold inventory) Cost of Goods Sold Merchandise Inventory (Recorded cost of inventory sold) Credit X Your discussion posts should address the impact on all 4 of the accounts shown in the above journal entries