CFE – Financial Transactions and Fraud Schemes — Question 36

Accounts receivable that never get collected are a common sign of fictitious revenue schemes.

Answer options

• A. True
• B. False

Correct answer: A

Explanation

The correct answer is A because uncollectible accounts receivable can suggest that a company is recognizing revenue that it will not actually receive, which is characteristic of fictitious revenue schemes. Answer B is incorrect as it overlooks the implication of uncollected receivables in relation to fraudulent accounting practices.