Which of the Following Is an Example of a Common

question 65

Multiple Choice

Which of the following is an example of a common type of financial reporting fraud?

• A)Capitalizing major overhauls to operating equipment.
• B)Deferring service revenue until it is delivered to customers.
• C)Recording sales for inventory sold with the right to return.
• D)Excluding a contingent liability that has been settled.

Convert annual interest rates to monthly rates.

Calculate simple interest on a monthly basis.

Compute net balances, finance charges, and new balances under various credit terms.

Complete loan amortization schedules and solve effective rate problems.

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of a company.

Statement Of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Net Cash

The total amount of cash available after all cash inflows and outflows have been accounted for during a specific period.

Financing Activities

Transactions involving obtaining resources from creditors and repaying them, as well as equity transactions with investors.