Which of the Following Is Not a Potential Fraud Related

question 23

Multiple Choice

Which of the following is not a potential fraud related to debt obligations?

• A) Long-term or short-term debt is misclassified.
• B) Entire loan payments are charged to either principal or interest.
• C) Dividends are paid in violation of restrictive covenants.
• D) Debt obligations are not properly authorized.

Calculate depreciation using different methods and understand the impact of depreciation on financial statements.

Record the acquisition and disposal of property, plant, and equipment, including journal entries.

Understand the impact of revaluations on financial statements and the tax implications.

Differentiate between capital and revenue expenditure.

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Definitions:

Direct Labor Costs

The wages and related benefits paid to employees who are directly involved in the production of goods or the provision of services.

Factory Overhead Applied

Costs associated with the production process that are not directly tied to a specific product, such as depreciation or utilities, allocated to products based on a systematic approach.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to individual units of production, based on a particular activity (e.g., machine hours, labor hours).

Direct Material Cost

The expense of raw materials and components directly used in the production of a product.