09 - Chapter 9 Conversion Investigation Methods MULTIPLE...

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Chapter 9 Conversion Investigation Methods MULTIPLE CHOICE 1. Which of the following types of information do credit reporting agencies not maintain? a. Information of current and former employers b. Account information such as payment schedules, items purchased, and buying habits. c. Marketing information such as customer breakdowns by age, sex, and income levels d. Consumer information such as addresses and family members e. Credit reporting agencies maintain all of the above information ANS: E D: Credit reporting agencies maintain all of the listed information 2. Using the data below the income from unknown sources for year 2 and 3 respectively are: Year 1 Year 2 Year 3 Home 220000 220000 220000 Car 25000 25000 50000 Investments 40000 50000 65000 Bank Account 3000 7000 10000 Total Assets 288000 302000 345000 Home Loan 200000 150000 100000 Auto Loan 20000 0 0 Student Loan 60000 20000 0 Total Liabilities 280000 170000 100000 Salary 95000 105000 Investments 4000 5000 Inheritance 6000 0 Total Income 105000 110000 Homeloan 13200 13200 Auto loan 9600 9600 Other living 20000 22000 Wedding 4000 0 Total Expenses 46800 44800 a. -27,800; -41,800 b. 275,800; 267,800 c. 81,800; 311,800 d. 65,800; 47,800 ANS: D D: Correct 3. Social Security contains information about an individual. Which item below is not included in an indi- vidual's social security number? a. Area the person was living when the number was issued b. A unique serial number for a person c. Race d. Group number
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ANS: C A: A is included in a social security number. B: B is included in a social security number. C: Correct D: D is included in a social security number. 4. Searching through someone's garbage is considered a legal activity when: a. the trash is more than 14 days old b. the trash is in the person's possession c. the trash has left the person's home or sidewalk d. Stealing a person's trash is never considered a legal activity. ANS: C A: Incorrect; there is no time requirement before trashing becomes a legal activity. B: Incorrect; searching trash while it is in possession of the suspect is against the law. C: Correct D: Incorrect 5. Income from known sources subtracted from total income gives a reasonable estimate of: a. Unknown funds b. Liabilities c. Living Expenses d. Net Worth ANS: A A: Correct 6. During an interview with Heidi Royce, she confessed to accepting $64,500 in kickbacks from a key supplier over the last 6 months. Heidi’s income for the year was $48,000 and her living expenses totaled $94,500 due mainly to medical costs of $40,000. She has a current net worth of $20,000. What was her (increase/decrease) in net worth? a. $6,500 b. $2,000 c. $71,000 d. $9,500 ANS: B B: Correct 7. What is the purpose of the net worth calculation in fraud? a.
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This note was uploaded on 01/31/2011 for the course ACCT 345 taught by Professor N/a during the Spring '10 term at Mountain State.

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09 - Chapter 9 Conversion Investigation Methods MULTIPLE...

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