Updated Jun-2023 CFE-Financial-Transactions-and-Fraud-Schemes Exam Practice Test Questions
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NEW QUESTION # 39
A journal in which all sales made on credit or cash are listed is:
- A. Accounts payable journal
- B. General journal
- C. Accounts receivable journal
- D. Disbursement journal
Answer: C
NEW QUESTION # 40
Organizations that had external audits actually had higher median losses and longer lasting fraud schemes than those organizations that were not audited.
- A. True
- B. False
Answer: A
NEW QUESTION # 41
Which of the following statements is TRUE with regard to the income statement?
- A. A company's cash balance is usually the first line item listed.
- B. Gross profit is equal to revenues less operating expenses.
- C. Gross revenue is the total amount of sales before deductions are applied.
- D. Net profit is the difference between total sales and the cost of goods sold.
Answer: D
Explanation:
Explanation/Reference: https://www.zoho.com/books/guides/what-is-an-income-statement.html#:~:text=The%20income%20statement%20shows%20a,on%20a%20good%20financial%20footing
NEW QUESTION # 42
False billing scheme states that:
- A. employees do not cause their company to sale merchandise that the company does not need.
- B. employees cause their company to sale merchandise that the company does not need.
- C. employees do not cause their company to purchase merchandise that the company does not need.
- D. employees cause their company to purchase merchandise that the company does not need
Answer: D
NEW QUESTION # 43
Blue sold $1,000 worth of merchandise and collected the payment from her customer in currency, but she only recorded the sale of $800 worth of merchandise. Blue turned $800 over to her employer and kept the remaining
$200. Blue's scheme is BEST classified as:
- A. An unrecorded sales (skimming) scheme
- B. A false billing scheme
- C. A cash larceny scheme
- D. An understated sales (skimming) scheme
Answer: D
Explanation:
Explanation/Reference: https://yellowbook-cpe.com/misappropriation-of-cash-larceny-skimming.html
NEW QUESTION # 44
Which sale occurs when the accomplice of the employee-fraudster "buys" merchandise, but the employee does not ring up the sale, and the accomplice takes the merchandise without making any payment?
- A. Fraudster sale
- B. Fake sale
- C. Whole sale
- D. Preliminary sale
Answer: B
NEW QUESTION # 45
According to the recommended methodology for responding to cybersecurity incidents, which of the following activities should occur during the preparation step?
- A. Limiting the damage caused by the attack
- B. Creating an incident response plan
- C. Restoring control of the affected systems
- D. Identifying all incidents of breach that occurred
Answer: B
Explanation:
Explanation/Reference: https://www.exabeam.com/incident-response/steps/
NEW QUESTION # 46
Which of the following is NOT the type of billing scheme?
- A. Invoicing via accomplice companies
- B. Invoicing via non-accomplice companies
- C. Invoicing via shell companies
- D. Personal purchases with company funds
Answer: A
NEW QUESTION # 47
Which of the following is NOT the method for stealing inventory and other assets?
- A. Asset requisition and transfer
- B. Larceny schemes
- C. Purchasing and receiving schemes
- D. Sales & Equipment handling
Answer: D
NEW QUESTION # 48
The scheme which reduces victim companies to issue fraudulent payments for goods or services that they have not received is called:
- A. Misappropriate claims
- B. Bogus claims
- C. Reliance billing
- D. Billing scheme
Answer: B
NEW QUESTION # 49
Which of the following is a TRUE statement regarding pyramid schemes?
- A. Illegal pyramid scheme participants make their money chiefly by recruiting new members
- B. It is illegal to design an organization to have a pyramidal structure for any purpose
- C. Illegal pyramids are designed to pay off later investors, not the earliest ones
- D. None of the above
Answer: A
Explanation:
Explanation/Reference: https://www.investopedia.com/terms/p/pyramidscheme.asp
NEW QUESTION # 50
June, a 76-year-old woman, receives a phone call from a man impersonating one of her relatives. He claims to have a lot of debt and asks her to secretly send him money so that the rest of the family will not find out. June has MOST LIKELY been victimized by which of the following schemes?
- A. Affinity fraud
- B. Missing-heir scheme
- C. Pretexting fraud
- D. Grandparent scheme
Answer: C
Explanation:
Explanation/Reference: https://www.acfe.com/article.aspx?id=504
NEW QUESTION # 51
____________ corrupt employees can cause inventory to be fraudulently delivered to themselves or accomplices.
- A. False credit slip
- B. False packing slip
- C. Fraudulent inventory slip
- D. False shipping slip
Answer: B
NEW QUESTION # 52
__________ are the amounts which are owned to other entities:
- A. Assets
- B. Expenses
- C. Liabilities
- D. Supplies
Answer: C
NEW QUESTION # 53
__________ can be defined as conduct detrimental to the organization and to the employee.
- A. Employee deviance
- B. All of the above
- C. Employee fraud
- D. Employee theft
Answer: A
NEW QUESTION # 54
Which of the following is NOT a method of identity theft prevention recommended for businesses?
- A. Require employees to use laptops rather than desktop computers.
- B. Use encryption to protect information sent internally through the company's wireless network.
- C. Restrict employees' access to customers' personal information.
- D. Collect customers' government identification numbers only when legally required to do so.
Answer: A
NEW QUESTION # 55
Blue borrowed her employer's snowplow for her own snow removal business, which she operates on the side.
Blue only used the snowplow on the weekends or after hours, when her employer was not open for business.
Blue falsified the mileage and usage logs for the snowplow so that no one would know she had been using it.
The snowplow was returned unharmed. Which of the following statements is MOST ACCURATE?
- A. Blue did not commit occupational fraud.
- B. Blue committed a fictitious sales scheme.
- C. Blue committed larceny of a noncash asset.
- D. Blue committed misuse of a noncash asset.
Answer: D
NEW QUESTION # 56
Employees steal an incoming payment and then place the incoming funds in an interest bearing account for:
- A. Converting stolen checks
- B. All of the above
- C. Short-term skimming
- D. Concealing the fraud
Answer: C
NEW QUESTION # 57
Schemes in which an employee physically misappropriates cash that has already appeared on the victim organization's books are known as:
- A. Cash larceny schemes
- B. General ledger schemes
- C. Unrecorded sales skimming schemes
- D. Understated sales skimming schemes
Answer: A
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Intro%20to%20Fraud-Chapter%20Excerpt.pdf
NEW QUESTION # 58
All of the following measures would help prevent the theft of company inventory EXCEPT:
- A. Restricting inventory access to authorized personnel only
- B. Having different people responsible for receiving inventory and shipping it
- C. Having the purchasing supervisor perform the physical inventory count
- D. Using prenumbered inventory receiving reports
Answer: D
NEW QUESTION # 59
The prime targets for skimming schemes which are hard to monitor and predict such as late fees and parking fees, are:
- A. Recorded sales
- B. Internal audits
- C. Register manipulations
- D. Revenue sources
Answer: D
NEW QUESTION # 60
If an analytical review reveals that a company's cost of goods sold has increased by a disproportionate amount relative to its sales, and no changes have occurred in the purchase prices, quantities purchased, or quality of products purchased, what does this most likely indicate?
- A. Inventory has been depleted by theft.
- B. The company started recording warranty liabilities.
- C. Sales were unusually poor this year compared to last year.
- D. There were excessive sales returns during the period.
Answer: A
Explanation:
Explanation/Reference: https://www.acfe.com/uploadedFiles/Shared_Content/Products/Self-Study_CPE/Intro%20to%20Fraud-Chapter%20Excerpt.pdf
NEW QUESTION # 61
Which of the following statements is FALSE with regard to counterfeit credit and debit cards?
- A. Counterfeiters create phone credit and debit cards through the use of what is commonly referred to as
"blank plastic". - B. Counterfeit credit and debit card schemes often involve collusion with merchants or a merchant's employees.
- C. The production of counterfeit credit and debit cards is too complicated for the use of high-speed printing facilities.
- D. Credit and debit card holograms are difficult to reproduce.
Answer: C
Explanation:
Explanation/Reference: https://www.usatoday.com/story/news/nation/2014/09/03/stolen-credit-cards-fenced-on-the-dark-web/15020053/
NEW QUESTION # 62
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