Inventory fraud often involves overstating inventory and/or understating cost of goods sold. The result is a decrease in the:
A) Gross profit ratio
B) Inventory turnover ratio
C) Number of days sales in inventory
D) Two of the above
E) All of the above

Question

Quizplus · Accepted Answer

A: Incorrect; gross profit ratio will increase
B: Correct
C: Incorrect; number of days sales in inventory will increase
D: Incorrect
E: Incorrect

Inventory Fraud Often Involves Overstating Inventory And/or Understating Cost of Goods