A Shell Company Fraud Involves

question 25

Multiple Choice

A shell company fraud involves

• A) stealing cash from an organization before it is recorded
• B) Stealing cash from an organization after it has been recorded
• C) manufacturing false purchase orders,receiving reports,and invoices
• D) A clerk pays a vendor twice for the same products and cashes the reimbursement check issued by the vendor.

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Definitions:

Special Order

A one-time or unusual order for products or services, often requiring customization or a departure from standard production processes.

Fixed Costs Per Unit

Fixed costs per unit decrease as production increases because the total fixed costs are spread over a larger number of units.

Selling Price

The amount of money charged for a product or service, or the sum for which something is sold.

Margin of Safety

The difference between actual sales and the break-even point, indicating how much sales can fall before a business incurs a loss.