Fraud Occurs When

question 103

Multiple Choice

Fraud occurs when

• A) a misstatement is made and there is both knowledge of its falsity and the intent to deceive.
• B) a misstatement is made and there is knowledge of its falsity but no intent to deceive.
• C) the auditor lacks even slight care in the performance in performing the audit.
• D) the auditor has an absence of reasonable care in the performance of the audit.

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Definitions:

High-low Method

A technique in cost accounting used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and their respective costs.

Variable Cost Per Unit

The cost that varies with the level of output or production, calculated on a per-unit basis.

Fixed Costs

Expenses that remain constant for a business regardless of the level of production or sales volume.

Break-even Sales

The amount of revenue needed to cover a business's total fixed and variable costs, marking the point at which a business neither makes a profit nor a loss.