Which would not be a technique for a company to inflate sales figures? b.-Recogn
ID: 2537285 • Letter: W
Question
Which would not be a technique for a company to inflate sales figures? b.-Recognizing sales on disputed claims against customers. Recognizing sales without shpping the goods. .? Recognizing full sales amount for partial shipments. . . de Improperly holding the accounting year open in order to recognize sales. c. a% e. U, which technique would not be helpful to uncover improper revenue recognition? a. Perform substantive analytical procedures relating to revenue using disaggregated b. Confirm with customers certain relevant contract terms and the absence of side c. Inquire of the entity's sales and marketing personnel or in-house legai counsel regarding sales or shipments near the end of the period and their knowledge of any unusual terms or conditions associated with these transactions. d. Be physically present at one or more locations at period end to observe goods e. All of the above are helpful. You are told that a company has a 20 percent profit margin and the discovered fraud has being shipped or being readied for shipment. 57 caused $1,400,000 more nceded revenue to cover the fraud. How much was stolen? b. $560,000. e. Some other amount 52. What is a red flag of kiting a. ? i Frequent deposits and checks in the same amount. ,' b. a Large deposits on Fridays.:.:in, i c. Short time lag between deposits and withdrawals. :': d : Only a and c. I e. Items a, b, and c. *Explanation / Answer
Solution 49:
Overstating allowance for sales discounts is not the technique for a company to inflate sales figures as it will result in decrease in sales figure.
Hence option A is the right choice.
Solution 50:
All the above techniques given are helpful to uncover improper revenue recognition. Hence option E is the right choice.
Solution 51:
More needed revenue to cover the fraud = $1,400,000
Gross profit margin = 20%
Amount stolen in fraud = $1,400,000*20% = $280,000
Hence option A is the right choice.
Solution 52:
All the items listed in a, b & c are the red flag of kiting. Hence option e is the right choice.
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