According to Beneish, Which of the Following Factors Are Predictive

question 44

Multiple Choice

According to Beneish, which of the following factors are predictive of financial statement fraud?

• A) Increase in sales growth in current period
• B) Sales/Total assets
• C) Market value of stockholders' equity/Book value of total debt owed
• D) Net Income/Total equity

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Definitions:

Unearned Revenue

Money received by a company for goods or services yet to be provided, considered a liability until the service or product is delivered.

Liability

Financial obligations or debts that a company owes to others, reflected on the balance sheet.

Drawing Account

An account used to record withdrawals of cash or other assets by the owner for personal use, reducing owner's equity.

Expense

An expense refers to the money spent or cost incurred in an entity's efforts to generate revenue representing the cost of doing business.