Which of the Following Is Least Indicative of Fraudulent Activity

question 69

Multiple Choice

Which of the following is least indicative of fraudulent activity?

• A) Numerous cash refunds have been made to different people at the same post office box address.
• B) Internal auditors cannot locate several credit memos to support reductions of customers' balances.
• C) Bank reconciliation has no outstanding checks or deposits older than 15 days.
• D) Three people were absent the day the auditors handed out the paychecks and have not picked them up four weeks later.

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Definitions:

Bonus

Additional compensation given to employees as a reward for their performance, typically cash or stock options.

Withdraws

Funds taken out from a business by the owner(s) for personal use, also known as drawings.

Partnership Dissolves

The process of ending a partnership agreement, which involves the redistribution or liquidation of assets among the partners and settling the partnership's obligations.

Old Partners' Capital Accounts

Accounts used to record the amount of equity owned by each partner in a partnership, prior to any changes or reallocation of partnership interests.