ACFE CFE-Financial-Transactions-and-Fraud-Schemes Study Group

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NEW QUESTION 46
Statistical sampling enables the examiner to predict the occurrence rate for the population and therefore determine with some accuracy the error rate, or the potential for fraud.

  • A. False
  • B. True

Answer: B

 

NEW QUESTION 47
If an analytical review reveals that a company’s cost of goods sold has increased by a disproportionate amount relative to its sales, and no changes have occurred in the purchase prices, quantities purchased, or quality of products purchased, what does this most likely indicate?

  • A. There were excessive sales returns during the period.
  • B. Inventory has been depleted by theft.
  • C. The company started recording warranty liabilities.
  • D. Sales were unusually poor this year compared to last year.

Answer: B

Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Intro%20to%20Fraud-Chapter%20Excerpt.pdf

 

NEW QUESTION 48
All of the following items appear on the balance sheet EXCEPT:

  • A. Assets
  • B. Cost of goods sold
  • C. Liabilities
  • D. Retained earnings

Answer: D

Explanation:
Explanation/Reference: https://www.investopedia.com/articles/fundamental-analysis/10/creative-accounting-balance-sheet.asp

 

NEW QUESTION 49
Revenue is recognized when it is:

  • A. Realized and Earned
  • B. Realized and Evidenced
  • C. Fictitious and Earned
  • D. All of the above

Answer: A

 

NEW QUESTION 50
Which of the following is TRUE regarding accrual-basis accounting?

  • A. Revenues are generally recognized when services are rendered to a customer.
  • B. The accrual method focuses on tracking a company’s current cash flow.
  • C. Accrual-basis accounting is simpler to use than cash-basis accounting.
  • D. Expenses are recorded in the accounting system as soon as they are paid.

Answer: B

Explanation:
Explanation/Reference: https://www.accountingtools.com/articles/what-is-the-accrual-basis-of-accounting.html

 

NEW QUESTION 51
……

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