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Could you explain the reason why the answer is C. I have read the explanation of book but still did not understand. Please refer link besides https://www.dropbox.com/s/88kzcruce4gz3cv/Screen%20Shot%202016-06-01%20at%2010.37.20%20am.png?dl=0
Many thanks and Best regards
Sr, the question is as below
The auditor of Q Co has identified that Q Co does not match dispatch notes to sales invoices as part of the controls in the sales system.
What is the potential consequence of this deficiency?
A. Customer orders may not be fulfilled accurately
B. Sales and trade receivables may be overstated
C. Sales and trade receivables may be understated
D. Sales invoices may be posted inaccurately in the receivables control account.Best regards,
The prime purpose of matching despatch notes to sales invoices is to ensure that all despatches made have been invoiced.
A: not right. The missing matching has nothing to do with the original order.
B: not sure why that would happen. If anything they would be understated because not all despatches had been invoiced
C: see above. This is the correct answer.
D: Again, whatever is invoiced, whether correct or not, should then be posted accurately to the control account.
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