Which of the Following Is Not an Advantage to Increasing

question 22

Multiple Choice

Which of the following is not an advantage to increasing expenses to conceal a fraud:

• A) By increasing expenses, the accounting equation often remains in balance.
• B) Expenses are closed or brought to zero balances at year-end, thus obscuring the audit trail.
• C) Recording such an expense involves a fictitious journal entry that generally doesn't have much documentary support to it.
• D) Increasing expenses is much easier than decreasing liabilities or revenues, both of which would quickly draw attention from vendors or management.

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Definitions:

Compensatory Damages

Monetary awards issued to a plaintiff to compensate for actual losses, injuries, or damages they have incurred.

Liability Case

A legal dispute or lawsuit in which the plaintiff seeks damages from the defendant due to injury or loss caused by the defendant’s actions or negligence.

Increase Of Hazard Clause

A provision in insurance policies allowing the insurer to void the policy if the risk insured against significantly increases.

Punitive Damages

Punitive Damages are monetary compensations awarded in civil cases to punish the defendant for willful, fraudulent, or grossly negligent acts, and to deter similar conduct.