The Journal Entry Testing Prescribed by SAS No

question 49

Multiple Choice

The journal entry testing prescribed by SAS No.99 identifies several common characteristics of fraudulent entries.Which of the following is one such characteristic?

• A) an entry for credit sales to a buyer who does not pay his dues on time
• B) an entry for repairs and maintenance of plant made every period
• C) an entry for creating provisions for bad debts
• D) an entry for asset made by the managing director of the company

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Definitions:

Equity Method Investment

A financial recording method for investments in other firms where the investor holds considerable influence without exerting complete control.

Consolidated Income Statement

A financial statement that combines the income statements of a parent company and its subsidiaries, showing the overall performance.

Step Acquisition

The process of acquiring control of another company in stages over time, rather than all at once.

Noncontrolling Interest

A minority stake in a company, where the stake does not afford the investor enough influence to dictate corporate policy.