A Type of Financial Statement Fraud That Is Accomplished by Shipping

question 28

Multiple Choice

A type of financial statement fraud that is accomplished by shipping more to customers than they ordered, with the expectation that they may return some or all of the items is called:

• A)improper asset recognition.
• B)improper expense recognition.
• C)channel stuffing.
• D)cooking the books.

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Definitions:

Adjustment

The process of making entries to correct accounts or to allocate amounts properly at the end of an accounting period.

Office Equipment

Assets like computers, desks, chairs, and printers that are used in an office setting for the operation of the business.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life.

Accumulated Depreciation

Overall depreciation expense tallied for a fixed asset since it started being used.