The Following Is a Summary of Information Presented on the Financial

question 50

Multiple Choice

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014. What would a horizontal analysis report with respect to current assets?

• A)An inventory turnover of 8 times
• B)A 30% increase in current assets
• C)A current ratio of .87
• D)Current assets that are 33.33% of total assets

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Definitions:

False Entries

Incorrect or misleading information entered into a record or document, particularly with the intent to deceive.

Defalcation

Misappropriation of funds or embezzlement, typically by a person trusted with the management of those funds.

Ponzi Scheme

A deceptive investment scheme that offers high returns with minimal risk to investors, but instead of earning from genuine business operations, it pays profits to earlier investors using the funds from new participants.

Defalcation

The misappropriation of funds or property entrusted to one's care, often involving fraud or embezzlement.