he

26. Which of the following is an "error" as distinguished from

"fraud”?
re

b.
2s

Embezzlement of company's fund Window dressing Clerical mistakes in the processing

of transactions Lapping
d.
27. Which of the following could be an example of fraud?
a. Mistakes in the application of the accounting principles. b. Clerical errors in
accounting data underlying the financial
statements. Misinterpretation of facts that existed when financial statements were prepared.
Misappropriation of assets or group of assets.

TAIT
a.
28. Which of the following is an example of fraudulent financial reporting?
Company management changes inventory count tags and overstates ending
inventory, while understating cost of goods sold. The treasurer diverts customer
payments to his personal due, concealing his actions by debiting an expense
account, thus overstating expenses. An employee steals small tools from the
company and neglects to return them; the cost is reported as a miscellaneous
operating expense. An employee omitted an entry to record a bank transfer to
cover a cash shortage.
d.

29. Which one of the following terms relates to the embezzling of

receipts? a. manipulation b. misrepresentation c. misappropriation d. misapplication
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