Which of the Following Fraudulent Activities Most Likely Could Be

question 14

Multiple Choice

Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal control over the revenue cycle?

• A)Fictitious transactions may be recorded that cause an understatement of revenues and an overstatement of receivables.
• B)Claims received from customers for goods returned (and unpaid for)may be intentionally recorded in other customers' accounts permitting a misappropriation of cash.
• C)Authorization of credit memos by personnel who receive cash may permit the misappropriation of cash.
• D)The failure to prepare shipping documents may lead to an understatement of inventory balances.

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Definitions:

Ions

Particles that carry a net electric charge as a result of either losing or acquiring one or more electrons.

Energy Waves

Oscillations that transfer energy from one place to another, such as sound waves, light waves, or electromagnetic waves.

Hydrolysis Reactions

Hydrolysis reactions involve the chemical breakdown of a compound due to its reaction with water.

Dehydration

The condition that results when the body loses more water than it takes in, leading to insufficient water to carry out normal functions.