Which of the Following Is a Use of the Last-Two-Digits

question 38

Multiple Choice

Which of the following is a use of the last-two-digits test?

• A) It narrows the range of transactions to be investigated.
• B) It identifies round numbers which are red flags for invented numbers.
• C) It indicates instances where digits have been transposed to make the number larger.
• D) It flags numbers that are repeated frequently as possible fraudulent transactions.

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting.

Capital Lease

A long-term lease agreement that designates the lessee (the person who rents the asset) as having the financial responsibilities and benefits of ownership.

Long-Term Asset

A long-term asset is an asset that is not expected to be converted into cash within a year and is used over a long period, such as property, plant, and equipment.

Intangible Asset

An asset that lacks physical substance and usually is very hard to evaluate, such as patents, trademarks, and copyrights.