Which of the Following Is NOT a Symptom of Liability

question 27

Multiple Choice

Which of the following is NOT a symptom of liability fraud?

• A) A sudden decrease in accounts payable/inventory ratio
• B) Inappropriately capitalizing costs that should be expensed
• C) An unusual increase in current ratio
• D) Payments made in later periods recorded as being paid in earlier periods

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Definitions:

Time Value

The time value concept suggests that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Net Present Value

A financial measure that determines the disparity between the current value of incoming cash and the current value of outgoing cash over a certain time frame.

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.

Present Value

Today's financial valuation of an anticipated future monetary sum or series of transactions, adjusted for a certain rate of return.