With liability fraud, which of the following is most likely to occur?

a. Liabilities will be overstated
b. Balances in general that relate to this fraud will tend to be low
c. Items will be expensed rather than capitalized
d. Net income will be understated

b
FEEDBACK: a. Incorrect. Liabilities will be understated.
b. Correct. Balances related to liability fraud will tend to be low.
c. Incorrect. Items will be capitalized rather than expensed.
d. Incorrect. Net income will be overstated.

Business

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