Which of the Following Is an Example of Fraudulent Financial

question 12

Multiple Choice

Which of the following is an example of fraudulent financial reporting?

• A)Company management falsifies inventory count tags thereby overstating ending inventory and understating cost of goods sold.
• B)An employee diverts customer payments to his personal use,concealing his actions by debiting an expense account,thus overstating expenses.
• C)An employee steals inventory and the "shrinkage" is recorded in cost of goods sold.
• D)An employee "borrows" tools from the company and neglects to return them;the cost is reported as a miscellaneous operating expense.

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Definitions:

Implied Condition

A term or condition in a contract not expressly stated but assumed to exist based on the nature of the agreement and the parties' intentions.

Constructive Condition

A condition inferred by law in contracts, implying that certain promises must be fulfilled before other corresponding duties are required.

Impossibility

Impossibility describes a situation where an event or action cannot occur or be performed.

Convey Real Estate

The act of transferring title, ownership, and rights of real estate property from one party to another through a deed or legal document.