One of the Most Common Ways to "Cook the Books

question 74

Multiple Choice

One of the most common ways to "cook the books" with inventory is to:

• A) overstate ending inventory
• B) understate ending inventory unit prices
• C) overstate cost of goods sold
• D) understate ending inventory

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Definitions:

Unlimited Liability

A legal obligation in business where owners are personally responsible for all debts incurred by the business.

Misappropriation

The unauthorized, improper, or unlawful use of funds or assets for purposes other than those for which they were intended.

Negligent Act

Conduct falling below the standard of care expected to protect others against unreasonable risk of harm.

Limited Partner

A type of investor in a partnership who has limited liability to the extent of their investment and typically does not participate in daily business management.