Three Conditions for Fraud Are Referred to as the "Fraud

question 61

Multiple Choice

Three conditions for fraud are referred to as the "fraud triangle." One of the sides of this triangle is incentives or pressures.The other two sides are

• A)opportunities and a desire to meet debt repayment obligations.
• B)opportunities and attitudes or rationalizations.
• C)attitudes or rationalizations and the need to maintain stock prices.
• D)the need to maintain stock prices and the need to meet debt repayment obligations.

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Definitions:

Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

Net Present Value

The calculation of the present value of an investment's expected cash inflows minus the initial investment cost, used to analyze the profitability of a project.

Depreciation Schedule

A document that outlines the reduction in value of an asset over time and how it is allocated as an expense across accounting periods for tax and accounting purposes.