According to the Text,why Is the Accounts Receivable Turnover Ratio

question 31

Multiple Choice

According to the text,why is the accounts receivable turnover ratio widely used in analyzing revenue-related fraud?

• A)Significant amounts of fictitious revenues and receivables will almost always affect this ratio except in rare cases.
• B)Adding fictitious receivables will generally decrease the number of days it takes to collect receivables.
• C)If the ratio generally exceeds 1, recording fictitious sales will significantly increase the ratio, making it easy to spot fraud.
• D)Since the ratio should ideally equal to 1, any deviation from this number is easy to detect.

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Definitions:

Misinformation Effect

The phenomenon whereby memories become distorted by exposure to misleading information after an event has occurred.

Memory Construction

The process by which the brain creates memories, not just by recalling but also by piecing together various fragments of information.

Dynamics

The branch of physics concerned with the study of forces and their effects on motion.

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Described or explained with pictures or diagrams.