Certified Fraud Examiner CFE-Financial-Transactions-and-Fraud-Schemes Exam Dumps

Detailed Explanation:

Rationale for Correct Answer:The going concern assumption means that a business will continue operating indefinitely and will not liquidate in the near future. This underpins the use of historical cost accounting and normal accrual-based reporting.

Analysis of Incorrect Options:

A. Materiality – Relates to significance of information, not continuity.

C. Cost – Refers to historical cost valuation.

D. Fair value – Refers to current market value, not continuity.

Key Concept:Going Concern Assumption in accounting.

Detailed Explanation:

Rationale for Correct Answer: Under accrual-basis accounting, revenues are generally recognized when earned (often upon delivery of goods or services), not necessarily when cash is received. Similarly, expenses are recorded when incurred, not when paid. This provides a more accurate picture of performance and financial position.

Analysis of Incorrect Options:

A – This describes cash-basis accounting, not accrual-basis.

B – Accrual accounting is more complex, not simpler.

C – Focuses on earned revenues and incurred expenses, not immediate cash flow.

Key Concept: Accrual accounting matches revenues with expenses in the period they occur.

Detailed Explanation:

Rationale for Correct Answer:Bribery is specifically defined as offering, giving, receiving, or soliciting anything of value to influence an official act or business decision. It is one of the four primary corruption categories.

Analysis of Incorrect Options:

A. Corruption – Broader category; bribery is one part of it.

B. Diverting business to vendors – A conflict of interest scheme, not bribery.

D. Lacking approval authority – Refers to control weaknesses, not corruption.

Key Concept:Bribery definition and its role in corruption.

Detailed Explanation:

Rationale for Correct Answer:Intangible assets are long-lived assets that lack physical substance and differ from property, plant, and equipment. Examples include goodwill, patents, trademarks, and copyrights. They provide long-term benefits but cannot be physically touched.

Analysis of Incorrect Options:

A. Tangible Assets – These have physical form (e.g., equipment, land).

C. Forced Assets – Not an accounting category.

D. None of the above – Incorrect since intangible assets match the definition.

Key Concept:Classification of Assets — tangible vs. intangible.