You Observe That a Company's Current Ratio Is Dramatically Increasing

question 42

Multiple Choice

You observe that a company's current ratio is dramatically increasing. This may indicate fraud in that:

• A) Contingent liabilities are not recorded.
• B) Accounts payable is understated.
• C) Expenses have been inappropriately capitalized as assets.
• D) Fixed assets are overstated.

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Definitions:

Entrepreneurship

The process of designing, launching, and running a new business, usually starting as a small enterprise.

Managing

The process of organizing, planning, leading, and controlling resources and tasks to achieve specific business objectives.