Fraud Triangle
Rita Crundwell wanting to maintain her wealthy lifestyle and horses if an example of which element of the Fraud Triangle?
Pressure
What internal control weakness allowed her to commit the fraud for so long?
She had sole control over the city’s accounts and bank statements.
Name the largest disadvantage or risk to operating as a sole proprietorship
Unlimited personal liability to debts of the business
If Barbara invests $12,000 of supplies into her business, which accounts are affected?
Debit Supplies, Credit B. Casey, Capital
What singer is known as the “Queen of Pop”?
Answer: Madonna
Jordan Belfort justified his crimes by saying his victims were wealthy investors. Which part of the Fraud Triangle does this represent?
About how much money did Rita Crundwell steal from the city of Dixon?
Over $53 million
What is the main purpose of financial reports?
To communicate a company’s financial performance and position to external users.
When Casey sells services on account to Tom Dayton for $300, which accounts are used?
Debit Accounts Receivable – Tom Dayton, Credit Sales
What country is home to the Great Barrier Reef?
Answer: Australia
In the Fraud Triangle, which element involves having access or ability to commit fraud without detection?
Opportunity
What was one red flag or unusual behavior that coworkers noticed about Rita’s lifestyle?
Lavish horse shows, luxury purchases, frequent absences from work.
What is “capital”?
Money or assets invested in a business by the owner(s).
Paying $150 on account to Emmer Supplies would do what?
Reduce cash and AP
Which ancient civilization built the Pyramids of Giza?
Answer: The Egyptians
What are the three components of the Fraud Triangle?
Pressure, Opportunity, Rationalization
Who first discovered the suspicious bank account that led to uncovering the fraud?
A city clerk, Kathe Swanson.
What does GAAP stand for and what is its purpose?
Generally Accepted Accounting Principles; rules for preparing consistent and accurate financial reports.
After all transactions, what does it mean if total debits do not equal total credits?
The books are out of balance—an error occurred in recording or posting transactions.
What sport uses a shuttlecock?
Answer: Badminton
Which criminologist developed the Fraud Triangle?
Donald Cressey
What position did Rita Crundwell hold in Dixon, Illinois?
Comptroller/Treasurer
Explain the main difference between financial accounting and managerial accounting.
Financial accounting focuses on external reporting; managerial accounting helps internal decision-making.
On December 31 2024, the YMCA collects $20,000 in monthly dues for January of 2025 gym use. In what year will the YMCA recognize the revenue?
2025
In tennis, what piece of fruit is found on the Wimbledon trophy?
Pineapple