The CPA examines all unrecorded invoices on hand as of February 28, 2012, the last day of

Question:

The CPA examines all unrecorded invoices on hand as of February 28, 2012, the last day of the audit. Which of the following misstatements is most likely to be uncovered by this procedure? Explain.
a. are overstated at December 31, 2011.
b. are understated at December 31, 2011.
c. Operating expenses are overstated for the 12 months ended December 31, 2011.
d. Operating expenses are overstated for the two months ended February 28, 2012.*

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...