Which of the Following Is an Example of Fraudulent Financial

question 3

Multiple Choice

Which of the following is an example of fraudulent financial reporting (management fraud) ?

• A)intentional overstatement of sales to increase reported earnings
• B)managers or others taking bribes from accounts payable suppliers
• C)the purchasing manager submitting travel expenses twice (i.e.duplicate payment)
• D)a clerk taking cash at the time a sale is made and not recording the sale

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Definitions:

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.

Efficient Level

The point at which resources are utilized in the most productive way, maximizing output or satisfaction without wasting any resources.

Price Charged

The amount of money demanded by a seller for a product or service.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit, leading to efficient pricing and output levels.