WGU C254 Topic 6 (questions and answers)complete

Which of the following is a transaction that creates real liabilities for a company? a. Co-signing on a loan as a secondary signee. b. Collecting cash prior to the performance of a service. c. None of the above. - Collecting cash prior to the performance of a service When accounts payable-related liabilities are understated, purchase and inventory are often ___________. - Understated Which of the following types of fraud symptoms usually provides the best opportunity to find contingent liabilities that should be recorded? a. Analytical Symptoms b. Documentary Symptoms d. Lifestyle Symptoms e. Tips and Complaints - Documentary Symptoms Recognizing unearned revenue as earned revenue is an example of what type of fraud? - Understatement of Liability Fraud When examining whether a company has understated accounts payable, which of the following ratios will be most helpful? - Accounts Payable/Cost of Goods Sold All of the following are common methods to commit understatement of liability fraud, except: a. Understate accounts payable. b. Over-recording future obligations. c. Recognizing unearned revenue as earned revenue. d. Understate accrued liabilities. - Over-recording future obligations True or FalseDetection of financial statement fraud can be seen on a spectrum of difficulty, one extreme being "easyto-detect" and the other extreme being "probably could-not-have-been-detected-by-any-auditor?" - True