You observe that a company's current ratio is dramatically increasing. This may indicate fraud in that:
A. Contingent liabilities are not recorded
B. Accounts payable is understated
C. Expenses have been inappropriately capitalized as assets
D. Fixed assets are overstated
E. Two of the above are true
Answer: B
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Fraud Chapter 13
- Which of the following is a good place to look for inadequate disclosures?
- When looking for accounting or documentary symptoms of fraud when merger occurs, one of the first steps should be to:
- Which of the following is not a way to under record liabilities?
- Of the following, the most difficult account for management to intentionally misstate is:
- Which of the following is usually the hardest fraud to detect?
- In liability fraud, liabilities are most often:
- A form 1099 with missing withholdings (where they should be reported) may be a fraud symptom for which liability account?
- Which of the following factors does not make fraud more difficult to detect?
- Each of the following assets is correctly linked with how it can be overstated except:
- Each of the following is a symptom relating to understatement of liability frauds except:
- When examining whether a company has under recorded accounts payable, each of the following ratios is helpful except:
- Inadequate disclosure fraud usually involves:
- Overstating cash is usually difficult because:
- When focusing on changes, you should consider changes from period to period in:
- Proactively searching for analytical symptoms related to financial statement fraud means that we are looking for accounts that appear:
- Analytical symptoms of accounts payable fraud most often relate to reported "accounts payable" balances that appear:
- FAS 5 requires contingent liabilities to be recorded as liabilities on the balance sheet if the likelihood of loss or payment is:
- The most common fraud involving car companies and the warranties they offer would most likely be:
- Recognizing something as a revenue instead of as a liability has a positive effect on the reported financial statements because:
- When accounts payable-related liabilities are understated, purchases and inventory are often ______, or the financial statements don't balance.
- Which of the following is a primary type of transaction that can create liabilities for a company?