Question

Which of this is not an element of the Fraud Triangle a. Pressure/Motivation b. Opportunity c. Rationalization d. Allowance

11. Inventory on hand is expressed as a. Asset on the Balance Sheet b. Expense on the Income Statement c. Liability on Balance Sheet d. None of the above

12. FOB Shipping Point means – a. Purchaser owns goods while in transit b. Purchaser pays transportation costs c. Inventory is included in purchaser’s inventory count d. All of the above

Answer 1

10. d. Allowance

11. a. Asset on the Balance Sheet

12. d. All of the above

10. Allowance is the amount set aside for meeting any particular liability to be araised. all others are the examples for fraud triangle.

11. Inventory held is expressed as asset in the balance sheet.

12. when goods are sent on FOB basis, the title and responsibility of goods transfer from the seller to the buyer when the goods are placed on a delivery vehicle. The purchaser owns the goods right after the goods been delivered to the shipping vehicle and such goods can be taken as the asset of Purchaser and the transportation charges are paid by the supplier too