What Type of Fraud Occurs When the Deposits of Current

question 2

Multiple Choice

What type of fraud occurs when the deposits of current investors are used to pay returns on the deposits of previous investors with no real investment happening?

• A) Skimming.
• B) Ponzi Scheme
• C) Channel Stuffing.
• D) Payroll Fraud.

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Definitions:

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.

Net Income

The profit resulting after all expenses, taxes, and costs have been deducted from total revenues.

Interest Expense

The cost incurred by an entity for borrowed funds, which can include costs related to bonds, loans, and lines of credit.

Inventory Turnover Ratio

A financial metric indicating how many times a company's inventory is sold and replaced over a specific period.