Which of the Following Statements Concerning Check Kiting Is True

question 7

Multiple Choice

Which of the following statements concerning check kiting is true?

• A)It is illegal.
• B)It is a crime.
• C)It is defined as a scheme of overdrawing account A by depositing a check in account B, then overdrawing account B to cover the insufficient funds in account A.
• D)All of the above.

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Definitions:

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as those of a single economic entity.

Entity Concept

An accounting principle that treats a business as a separate entity from its owners for financial reporting purposes.

NCI

Non-Controlling Interest, which refers to the ownership in a subsidiary not held by the parent company, represented in the equity section of the consolidated financial statements.

Liability

A financial obligation or debt owed by an individual or entity to another party that has to be paid back in the future.