When management fraud occurs, companies usually:
a. overstate assets and net income.
b. understate assets and net income.
c. overstate assets and understate net income.
d. understate assets and overstate net income.
a
FEEDBACK: a. Correct.
b. Incorrect. Usually, when management fraud occurs, companies overstate assets on the balance sheet and net income on the income statement.
c. Incorrect. Usually, when management fraud occurs, companies overstate assets on the balance sheet and net income on the income statement.
d. Incorrect. Usually, when management fraud occurs, companies overstate assets on the balance sheet and net income on the income statement.
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