Cfe Exam

Front 1

The balance sheet is know as......?

Back 1

Statement of Financial position

Front 2

When is the balance sheet snapshot

Back 2

Last day of the accounting period

Front 3

What is the accounting equation

Back 3

Assets=liabilities + equity

Front 4

How are assets listed on the balance sheet

Back 4

By how soon they are expected to be converted to cash.

Front 5

How are liabilities presented on the balance sheet

Back 5

In order of maturity. Obligations that are expected to be paid within 1 year are listed first.

Front 6

What are liabilities that are not due for more than 1 year called

Back 6

Long term liabilities

Front 7

When does capital stock increase

Back 7

When owners of a company invest in it through purchase of capital stock

Front 8

When does retained earnings increase

Back 8

when the company has earnings

Front 9

When do retained earnings decrease

Back 9

When the company has losses or when dividends are distributed

Front 10

What time snapshot does the income statement show

Back 10

How much profit or loss a company earned during a period of time such as quarter or a year

Front 11

When does the balance of the income statement become zero and what happens to the income or loss

Back 11

At the end of the year, the results are added or subtracted from retained earnings on the balance sheet.

Front 12

How is the amount left over from sales to pay the company s operating expenses calculated

Back 12

The difference between net sales and COGs known as gross profit

Front 13

What happens to income that is not distributed

Back 13

It is transferred to the retained earnings.

Front 14

Which statement is used to determine a company's true financial performance

Back 14

The statement of cash flows

Front 15

What are the three sections of the cash flows statement

Back 15

Investing activities operating activities and financing activities

Front 16

What is the difference between the cash flows direct method and the cash flows indirect method

Back 16

The direct method list the sources of operating cash flows and the use of operating cash flows the indirect method reconciles net income per the income statement Annette cash from operating activities

Front 17

What is the most common use of fraudulent statements

Back 17

To bolster and organizations appearance success in the eyes of potential and current investors

Front 18

What is the difference between first-party cyber coverage and third-party

Back 18

first-party coverage includes coverage against losses such as Data destruction extortion theft and hacking third party coverage provides coverage when a company sued 4 problems caused by technology product errors and omissions

Front 19

What are the three types of occupational fraud

Back 19

Corruption asset misappropriation and financial statement fraud

Front 20

What is the most common of all occupational frauds

Back 20

Asset misappropriation

Front 21

Name 3 asset misappropriation schemes

Back 21

cash receipts, fraudulent disbursements, and theft of inventory and other non cash assets.

Front 22

name 2 categories of cash receipt schemes

Back 22

skimming and larceny

Front 23

define cash larceny

Back 23

theft of money that has already appeared on company's books

Front 24

Define Skimming

Back 24

theft of money that has not been accounted for

Front 25

Define understated sales

Back 25

Transactions posted to the books but for a lower amount than what was collected.

Front 26

What is a false discount skimming scheme

Back 26

when full payment for an item is accepted but the transaction is recorded as if the customer had been given a discount

Front 27

How do skimed receivables appear on the books

Back 27

appears as an absence payment and therefore results in a delinquent account

Front 28

Define Lapping: Robbing peter to pay paul

Back 28

Crediting of one acct. through the abstraction of money from another acct.

Front 29

Name a way that fraudsters attempt to conceal a skimmed payment as it relates to statements

Back 29

intercept the account statement by changing address or altering the statements

Front 30

How can skimming be concealed as it relates to expense accounts and what is the result

Back 30

instead of debiting cash acct the fraudster could choose to debit an expense account.

Result: company's books in balance, receivable account is credited so acct is not delinquent but cash is never recorded.

Front 31

name/ describe the problem with skimming schemes as it relates to inventory

Back 31

it will always leave inventory shortage and a rise in COGS.

Front 32

in a short-term skimming scheme what happens to the payment(s)

Back 32

payments are delayed in posting. Payment is posted in an interest bearing account or a short term security.

Front 33

explain why routine acct. reconciliation is not likely to prevent a skimming

Back 33

because skimming is an off book fraud

Front 34

What is cash larceny

Back 34

the intentional taking of an employers cash

Front 35

explain an unsophisticated way to avoid detection when stealing currency?

Back 35

Steal the currency in very small amounts.

Front 36

explain reversing transactions and what is the result

Back 36

Processing false voids or refunds. Results: causes register log to reconcile to the amount of cash on hand after theft.

Front 37

explain register manipulation; what is the purpose

Back 37

manually alter the register log the purpose is to force a balance between cash on hand and actual cash received.

Front 38

explain alterting cash counts

Back 38

employee records the wrong amount after cash is totaled.

Front 39

Explain lapping in cash larceny

Back 39

employee steals the deposit form day one and replaces it with day two's deposit.

Front 40

explain deposits in tranist

Back 40

money that has been recorded in the company cash but has not cleared the bank

Front 41

why are cash larceny schemes harder to get away with

Back 41

because it leaves and audit trail

Front 42

name four ways to prevent cash larceny

Back 42

1. separation of duties 2. assignment rotation and mandatory vacations 3. surprise cash counts 4. physical security of cash

Front 43

explain a fraudulent disbursement scheme

Back 43

making a distribution of company funds for dishonest purpose

Front 44

how does register disbursment schemes differ from skimming and cash larceny

Back 44

The removal of the cash from the register is recorded.

Front 45

what are the 2 register disbursement schemes

Back 45

false refunds and false voids

Front 46

Define retainage

Back 46

a certain amount withheld from each draw request by the contractor. The amount is not paid until the contract has been finished.

Front 47

define a direct-action virus

Back 47

a virus that loads itself onto the target systems memory, infects other files and then unloads.

Front 48

What is a nonperforming loan

Back 48

a loan that is in default or close to being in default

Front 49

what are the 3 common methods for concealing liabilities and expenses

Back 49

1. impropertly capitalizing costs rather then expensing them 2. failing to discloe warranty cost and product-return liailities 3. omitting liabilities or expenses.

Front 50

Define an altered payee scheme

Back 50

The altered payee scheme is a type of check tampering fraud in which an employee intercepts a company check intended for a third party and alters the payee

Front 51

Define double-pledging collateral

Back 51

In a double-pledging collateral scheme, borrowers pledge the same collateral with different lenders before liens are recorded and without telling the lenders.

Front 52

What are 2 basic preventive measures for payroll fraud.

Back 52

There are two basic preventive measures for payroll-related fraud: segregation of duties and periodic payroll review and analysis.

Front 53

Define rent a patient schemes

Back 53

paying individuals to undergo unnecessary medical procedures that are then billed to the patient’s insurer or health care program.