LSUS MBA 710 Exam 3 | QUESTIONS AND ANSWERS
Which of the following is a reason d. All of the above
that a chief executive officer
might commit financial
statement fraud?
a. To receive or increase
a performance bonus
b. To avoid termination due
to poor performance
c. To conceal the
company's true
performance
d. All of the above
The CFO of ABC corporation d. Playing the accounting system
manipulates the assumptions
used to calculate depreciation
charges in order to increase
earnings to a desired figure, which
general method of financial
statement fraud is the CFO
using?
a. Going outside the accounting
system
b. Beating the accounting system
c. Going around the accounting
system
d. Playing the accounting system
,The CFO ABC company decided b. Revenue recognition
to report the future sales with
XYZ company as current year
sales. The contract between
ABC and XYZ specifically says the
sales will occur next February.
This is a violation of which
generally accepted accounting
principle?
a. Matching
b. Revenue recognition
c. Historical cost
d. Periodicity
XYZ Kids Entertainment is being c. Full disclosure
sued by several customers for
product safety. It is probable
that the company will lose the
case and be ordered to pay the
plaintiff a significant sum of
money. If XYZ fails to report this
information somewhere in its
financial statements, it is violating
the GAAP concept of:
a. Cost-benefit
b. Matching
c. Full
disclosure
d. Materiality
A company's financial statements d. Management
are the responsibility of:
a. The accounting department
b. The independent auditors
c. The shareholders
d. Management
Which of the following is a red c. Several unusual and highly complex sales transactions recorded
flag associated with fictitious close to the period end
revenues?
a. An unusual decline in
the number of days'
purchases in accounts
payable
b. An unusual decrease in gross
margin
c. Several unusual and highly
complex sales transactions
, recorded close to the period
end
d. Recurring losses while
reporting increasing cash
flows from operations
FASB oversees the auditors of False
public companies, protect the
interests of investors, and further
the public interest in the
preparation of informative,
accurate, and independent
audit reports.
Select one:
True
False
Which of the following is a reason d. All of the above
that a chief executive officer
might commit financial
statement fraud?
a. To receive or increase
a performance bonus
b. To avoid termination due
to poor performance
c. To conceal the
company's true
performance
d. All of the above
The CFO of ABC corporation d. Playing the accounting system
manipulates the assumptions
used to calculate depreciation
charges in order to increase
earnings to a desired figure, which
general method of financial
statement fraud is the CFO
using?
a. Going outside the accounting
system
b. Beating the accounting system
c. Going around the accounting
system
d. Playing the accounting system
,The CFO ABC company decided b. Revenue recognition
to report the future sales with
XYZ company as current year
sales. The contract between
ABC and XYZ specifically says the
sales will occur next February.
This is a violation of which
generally accepted accounting
principle?
a. Matching
b. Revenue recognition
c. Historical cost
d. Periodicity
XYZ Kids Entertainment is being c. Full disclosure
sued by several customers for
product safety. It is probable
that the company will lose the
case and be ordered to pay the
plaintiff a significant sum of
money. If XYZ fails to report this
information somewhere in its
financial statements, it is violating
the GAAP concept of:
a. Cost-benefit
b. Matching
c. Full
disclosure
d. Materiality
A company's financial statements d. Management
are the responsibility of:
a. The accounting department
b. The independent auditors
c. The shareholders
d. Management
Which of the following is a red c. Several unusual and highly complex sales transactions recorded
flag associated with fictitious close to the period end
revenues?
a. An unusual decline in
the number of days'
purchases in accounts
payable
b. An unusual decrease in gross
margin
c. Several unusual and highly
complex sales transactions
, recorded close to the period
end
d. Recurring losses while
reporting increasing cash
flows from operations
FASB oversees the auditors of False
public companies, protect the
interests of investors, and further
the public interest in the
preparation of informative,
accurate, and independent
audit reports.
Select one:
True
False
