Which Is Not a Symptom of Liability Fraud

question 17

Multiple Choice

Which is not a symptom of liability fraud?

• A) Decrease in warranty expense estimate
• B) Accounts payable grow faster than cost of goods sold & inventory
• C) Unusual increase in current ratio
• D) Decrease in accruals & unearned revenue from prior periods

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Definitions:

Gestalt Principle

A theory in psychology that proposes the human brain sees objects in their entirety before perceiving their individual parts, emphasizing the whole of anything is greater than its parts.

Closure

A psychological term referring to the desire or need for a clear, comprehensive, and emotionally satisfying resolution or conclusion.

Proximity

The physical or psychological closeness between people, which can influence relationships and social interactions.

Figure-Ground Relationship

A visual perception principle stating that people instinctively perceive objects (the figure) as distinct from their surroundings (the ground).