Exam (elaborations)
ACFE- FINANCIAL TRANSACTIONS & FRAUD SCHEMES
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ACFE- FINANCIAL TRANSACTIONS & FRAUD SCHEMES
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ACFE- FINANCIAL TRANSACTIONS & FRAUDSCHEMES
Asset Turnover Ratio - Answers -net sales/average total assets
Historical Cost - Answers -The proper basis for initially recording a piece of equipment
on a company's books.
GAAP vs. IFRS - Answers -_ GAAP more "rule-based"
_ IFRS more "principle-based"
- more simple
Statement of Cash Flows- 3 Activities - Answers -Operating, Investing & Financing
Activities
Accounts Receivable Turnover - Answers -net credit sales on account/average net
accounts receivables
collection ratio - Answers -365/Receivable Turnover
Inventory Turnover - Answers -cost of goods sold/average inventory
Average # of days Inventory is in Stock - Answers -365/Inventory Turnover
Debt to Equity Ratio - Answers -total liabilities/total equity
Profit Margin Ratio - Answers -net income/net sales
Asset Turnover - Answers -net sales/average total assets
3 common methods for concealing liabilities & expenses on financial statements: -
Answers -1) Failing to disclose warranty costs & product return liabilities
2) Improperly Capitalizing Costs instead of expensing them
3) Omitting liabilities & Expenses
A fraud scheme where an accountant fails to write down obsolete inventory to its current
market value has what effect on a company's Current Ratio? - Answers -The current
ratio will be artificially inflated
Fraudulent sales or ficticious revenue schemes typically result in a corresponding debit
in one of 2 areas: ? - Answers -Cash or Account Receivables
T or F- Failing to record bad debt expense for the period will result in fraudulently
overstated accounts Receivable? - Answers -TRUE
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