fictitious revenues‚ timing differences‚ concealed liabilities & expense‚ improper asset valuation‚ or asset/revenue overstatements (just to name a few)‚ (Frempong‚ 2012). It is essential one be educated and thoroughly understand the different types of financial statement fraud schemes and the accompanying accounting transactions in order to better identify fraud. Fraud Schemes and Examples Fictitious Revenue When management feels there is an immense amount of pressure for revenues to be greater
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ACCT1501 Practice Exam Questions & Solutions 2011S1 QUESTION 1 ACCOUNTS RECEIVABLES • • • • On 1st July‚ 2007‚ one of SSS’s customers‚ BBB‚ went bankrupt. BBB owes SSS $2‚500 and there is no hope for recovering this amount. On 1st October‚ SSS collected $85‚000 from outstanding accounts. SSS Company’s financial year ends on 31st December. During 2007‚ SSS sold goods for cash for $22‚000‚ and on credit $80‚000. On 1st January 2007‚ SSS Ltd. has a debit balance of $30‚000 in Accounts
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Insurance policy $8000 Cash $8000 2. Rent 12‚000 Cash 12‚000 Q 3 1. service revenue 3700 Office supplies exp 600 Depreciation exp 2500 Rent exp 1900
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a a e 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. a a e b a c b d e c -1- Suggested solution -- ACCO 230 Midterm exam‚ May 2013 Question 2 1-a. NM Ltd. Income Statement For the Year Ended December 31‚ 2012 Sales revenue Less: Sales returns and allowances Net sales Cost of goods sold Gross profit $210‚000 6‚000 204‚000 77‚000 127‚000 Operating expenses Salaries Rent Promotional and advertising Depreciation Operating income 106‚000 21‚000
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PROBLEM 1-1B (a) VINCE’S TRAVEL AGENCY | | | | | | | | | | | | | Owner’s Equity | | | Cash | + | AccountsReceivable | + | Supplies | + | Equipment | = | AccountsPayable | + | Owner’sCapital | – | Owner’s Drawings | + | Revenues | – | Expenses | | | | | | | | | | | | | | | | | | | | 1.2.3.4.5.6.7.8.9.10. | | +$15‚000+ 15‚000+ –600+ 14‚400+ –3‚000+ 11‚400+000‚000+ 11‚400+ –800+ 10‚600– +3‚000+ 13‚600+ –500+ 13‚100+ –500+ 12‚600+ –2‚500+ 10
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15-25 6A Identify point of revenue and expense recognition. Moderate 15-20 7A Calculate revenue at various points of recognition. Moderate 20-30 8A Calculate revenue‚ expense‚ and gross profit – percentage-of-completion and zero profit methods. Moderate 15-25 9A Revise revenue‚ expense‚ and gross profit – percentage-of-completion. Complex 15-25 10A Calculate revenue‚ expense‚ and gross profit – percentage-of-completion method. Moderate 20-30 11A Revenue recognition
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(1) Consolidated Statement of Income Operating Revenues Revenue from services Sales revenue Less: Credit Card Discount Less: Sales Discount Less: Sales Returns & Allowances Total revenues Operating Expenses Cost of goods sold Salaries expense Rent expense Advertising expense General and administrative expenses Depreciation expense Other operating expenses Total expenses Operating Income Other Items Investment income Interest expense Loss on PPE sold Income before Income Taxes
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December and January. Pays the cell phone invoice outstanding at November 30. Issues a check to Natalie’s brother for the amount owed for the design of the website. Receives a deposit of $60 on a cookie class scheduled for early January. Additional revenue earned during the month for cookie-making classes amounts to $4‚000. (Natalie has not had time to account for each class individually.) $3‚000 in cash has been collected and $1‚000 is still outstanding. (This is in ad- dition to the December 5 and
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extending the knowledge required to draw conclusions and the skills required to audit advanced accounting and information systems. With management consulting practices growing and information systems becoming a larger percentage of public accounting revenue‚ MIS professionals are in high demand. If you are considering a degree in computer or information systems‚ you
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BU227 – Financial Accounting Module 1 Provided by: Laurier SOS Things to Cover The Accounting Environment IFRS and GAAPs Accounting’s Conceptual Framework Financial Statements Overview Recording Transactions Accrual Accounting Account’s Receivable Amortization Inventory The Accounting System Financial Accounting System (preparation of four basic financial statements). Managerial Accounting System (preparation of detailed plans‚ forecasts and reports). External Decision Makers
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