While Camila Incorporated has had a good sales year, they do not have much cash near the end of the year. To avoid needing to take out a loan to pay dividends to shareholders, Camila chose to push some sales in December into the next fiscal year. What type of fraud scheme is Camila using to understate financial performance?
A) Sales cutoff
B) Expense cutoff
C) Unrecorded revenue
D) Expensing capitalized costs

Question

Quizplus · Accepted Answer

Sales cutoff fraud involves manipulating the timing of sales recognition to influence financial results, such as deferring sales to a later period to understate current performance, as described in the scenario.

While Camila Incorporated Has Had a Good Sales Year, They