The Fraud Triangle Applies to

question 213

Multiple Choice

The fraud triangle applies to

• A) U.S companies but not international companies.
• B) international companies but not U.S. companies.
• C) U.S. and Canadian companies but not other international companies.
• D) U.S and international companies.

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Definitions:

Current Accounts

Balances held in checking accounts that are typically used for the day-to-day money transactions and management.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Acid-Test Ratio

A stringent indicator of whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.