Which of the Following Terms Describes a Fraud Scheme in Which

question 31

Multiple Choice

Which of the following terms describes a fraud scheme in which two conspiring companies exchange payments and services for the sole purpose of inflating revenues?

• A) billing scheme
• B) kickback
• C) switch contract
• D) swap transaction

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balances at the end of a period, relying on physical counts to measure stock levels.

Detailed Records

Comprehensive, accurate documentation of transactions, activities, or events, maintained for reference and compliance.

Goods Held for Resale

Refers to items that a company has in its inventory that are purchased with the intention of being sold to customers rather than being used in the production process.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting overheads, payroll, taxation, and interest.