Question

8) During the general ledger and financial reporting cycle: A. budgets are created and agreed upon. B. transactional level data is accumulated, summarised, adjusted and reported to internal users. C. transactional level data is accumulated, summarised, adjusted and reported to external users. D. all of the options are correct. 9) Reporting sales in the current period which have not yet shipped so that annual sales figures are inflated is an example of: A. inventory theft. B. non-existent sales. C. credit fraud. D. non-existent customers. 10) Cybercrime can be defined as: A. any crime that is committed when people are not face-to-face. B. a crime committed using a computer and or the internet. C. a financial crime committed using a computer and the internet. D. none of the options are correct.

Answer 1

8) Answer: C. transactional level data is accumulated, summarised, adjusted and reported to external users.

The general ledger and financial reporting cycle involves accumulating transaction data in the general ledger, preparing trial balance, and the financial statements such as the income statement, balance sheet, cash flow statement. These are primarily prepared for the use of external users. Hence, option C. is correct.

Budgeting is not a part of the financial reporting cycle and is used mainly for internal purposes while the financial reporting cycle refers to reporting to external users. Hence, options A. and B. are incorrect.

9) Answer: B. non-existent sales.

Reporting sales without the actual sale having taken place indicates reporting non-existent sales. Hence, option B. is the correct answer.

There is no inventory theft involved and hence option A. is incorrect. There is also no credit involved due to which option C. is incorrect. Customers to whom the sales have been reported as made may be existent and hence option D. is incorrect.

10) Answer: B. a crime committed using a computer and or the internet.

Cybercrime necessarily involves the use of a computer or internet and hence option B. is the correct answer.

A crime that is committed when people are not face-to-face is not necessarily a cybercrime unless the use of a computer or internet is involved and hence, option A is incorrect.

Cybercrimes includes in addition to financial crimes other non-financial crimes such as hacking into emails or social media accounts, or child pornography, etc. Hence, it is not only restricted to financial crimes and hence option C. is incorrect.