Which of the Following Was NOT One of the Schemes

question 43

Multiple Choice

Which of the following was NOT one of the schemes used by Beazer Homes to manipulate its earnings?

• A) Improper recording of revenue on sale-leaseback transactions
• B) Fraudulently increased land inventory expense accounts to reduce earnings
• C) Over-reserving of house cost-to-complete expenses to increase reported earnings in earlier periods
• D) Recording revenue from roundtrip transactions prematurely

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including costs related to factory equipment maintenance, factory management salaries, and utilities.

Period Cost

Expenses that are not directly tied to the production process and are charged to the period in which they occur, such as selling and administrative expenses.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are significant in cost.

Workman's Compensation

Insurance that provides wage replacement and medical benefits to employees injured in the course of employment.