Fixed Assets Are Subject to Manipulation Through Several Different Schemes

question 52

Multiple Choice

Fixed assets are subject to manipulation through several different schemes. Which scheme is NOT commonly used?

• A) Booking fictitious assets
• B) Misrepresenting asset valuation
• C) Improperly capitalizing inventory and startup costs
• D) Depreciating an asset to an amount less than zero

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Definitions:

Revenues

Increases in owner’s equity as a result of providing services or selling goods to customers.

Budget Performance Report

A report that summarizes actual costs, standard costs, and the differences for the units produced.

Cost Centers

Parts of an organization to which costs can be allocated, but which do not directly generate revenues.

Operating Expenses

Costs incurred during the normal functioning of a business, excluding the cost of goods sold.