Which of the Following Signals a Potential Fraud That May

question 17

Multiple Choice

Which of the following signals a potential fraud that may cause the overstatement of inventory accounts?

• A)Reserves for contingencies are reducing rapidly.
• B)Inventory amounts are growing faster than sales.
• C)Repairs and maintenance accounts have significant credit entries.
• D)The purchase of manufacturing equipment is occurring at a rapid rate.

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Definitions:

Behaviorism

Learning theory that emphasizes the predictable role of environment in causing observable behavior.

Social Learning Theory

A theory that suggests individuals learn behaviors and norms through observation, imitation, and modeling from others within a social context.

Injection

The act of administering a liquid, especially a drug, into a person's body using a syringe and needle.

Cries

Vocalizations or sounds made as expressions of distress, pain, or discomfort.