Which of the Following Is Most Likely an Indicator of Potential

question 33

Multiple Choice

Which of the following is most likely an indicator of potential revenue fraud?

• A) A sudden increase in the sales discount percentage
• B) A high sales return percentage
• C) A rapidly increasing asset turnover ratio
• D) A rapidly decreasing working capital turnover ratio

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Definitions:

Non-cash Item

Expenses or income that do not result in an actual cash outlay or receipt, like depreciation, amortization, or stock-based compensation.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up.

Statement Of Comprehensive Income

A financial statement that presents a company's total income, including items that are not included in the net income.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, a key indicator of a company's profitability.