Asset misappropriations have an effect on the liabilities and do also have an indirect effect on the equity account.
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A. B.B
The statement "Asset misappropriations have an effect on the liabilities and do also have an indirect effect on the equity account" is False.
Asset misappropriation refers to the theft or misuse of an organization's assets, such as cash, inventory, or equipment, by an employee or other party. When such a misappropriation occurs, it affects the asset accounts and not the liability or equity accounts.
Liabilities are obligations that an organization owes to others, such as loans, accounts payable, or accrued expenses. Asset misappropriation does not affect liabilities since liabilities are not assets and are not impacted by their theft or misuse.
Equity accounts, on the other hand, represent the residual interest in the assets of an organization after deducting liabilities. An asset misappropriation can indirectly impact equity accounts only if it causes a decrease in the value of the assets. For example, if inventory is stolen, this can lead to a decrease in the value of assets, which in turn can result in a decrease in equity accounts. However, this is an indirect effect and does not directly impact equity accounts.
In summary, asset misappropriations affect only asset accounts and do not have a direct impact on either liabilities or equity accounts. Therefore, the statement "Asset misappropriations have an effect on the liabilities and do also have an indirect effect on the equity account" is false.