Which of the Following Is NOT an Example of Financial

question 21

Multiple Choice

Which of the following is NOT an example of financial statement fraud:

• A) Managing the reserves in order to "smooth" earnings
• B) Accruing an expense in the current period when it should be recognized in the following period
• C) Filling an order, billing the customer for the order, and then shipping it to a company owned warehouse
• D) Both "a" and "b"

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Definitions:

Straight-Line Depreciation

A technique for distributing the expense of a physical asset evenly across its lifespan in identical yearly sums.

Tax Rate

The percentage at which an individual or corporation is taxed, often varying by income level, legal entity, or country.

CCA Class

In Canadian tax law, refers to the classification of depreciable property for purposes of calculating capital cost allowance, which is a type of depreciation for tax purposes.

Net Advantage

The total benefit gained from a particular action or decision, minus the costs incurred.