Which of the Following Ratios Is Relatively More Helpful in Highlighting

question 44

Multiple Choice

Which of the following ratios is relatively more helpful in highlighting revenue-related frauds?

• A) Working capital turnover ratio
• B) Earnings per share
• C) Asset turnover ratio
• D) Accounts receivable turnover

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Definitions:

Activity Cost Pools

Aggregations of all the costs associated with a particular activity or process, used in activity-based costing.

Underapplied Overhead

A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.

Batch Setup

The process and costs associated with preparing equipment and operations for producing a set quantity of goods.

Manufacturing Overhead

All indirect factory-related costs incurred during the production process, excluding direct materials and direct labor costs.