Misappropriation of Company Assets Can Occur in the Following Ways

question 53

Multiple Choice

Misappropriation of company assets can occur in the following ways

• A)employees can set up accounts for fictitious vendors and process payments to these vendors
• B)customers can create fictitious employees and misdirect payroll for these employees to their own accounts
• C)employees can make purchases of inventory or supplies on the company account and use the items for their own personal use
• D)customers can set up accounts receivable for fictitious customers and process payments to these customers
• E)both A and C
• F)both B and D

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Definitions:

Future Value

Value of cash flows at a future date, taking into account interest accumulated between when the cash flow occurred and the future date.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset’s book value declines compared to straight-line depreciation.

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life.

Depreciation Tax Shield

The reduction in taxes due to depreciation’s reducing taxable income.