To identify the type of fraud in the following cases: Marcus pays $30 for a baseball of $70 by changing the price-tag. Craig loses $500 by investing in a multilevel marketing scheme. A bank employee diverts the amount from a wealthy customer’s account to his personal account. The bank was held responsible for the act of the employee. A CEO showed profits for the year 2018, when there was a loss of $150 million. The CEO was held responsible and convicted with jail and fine. The government lost $50 million as it was overcharged by contractor and sub-contractors in the Middle East for fictitious hours and assets. A student accessed the school computer and changed her school grade to be accepted into graduate school.

Question

1. "The steps in the accounting cycle for a merchandising company are different from the accounting cycle for a service company." Do you agree or disagree? Explain. 2. A local bank reported that it lost $150,000 as the result of an employee fraud. Mr. X is not clear on what is meant by an "employee fraud." Explain the meaning of fraud to Mr. X and give examples of frauds that might occur at a bank. 3. On September 1, ABC Company had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sept. 6 Purchased 80 calculators at $20 each from DeVito Co. for cash. Sept. 9 Paid freight of $80 on calculators purchased from DeVito Co. Sept. 10 Returned 2 calculators to DeVito Co. for $42 credit (including freight) because they did not meet specifications. Sept. 12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. Sept. 14 Granted credit of $31 to Mega…

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Question

Chapter 1, Problem 3SC

To determine

To identify the type of fraud in the following cases:

Marcus pays $30 for a baseball of $70 by changing the price-tag.

Craig loses $500 by investing in a multilevel marketing scheme.

A bank employee diverts the amount from a wealthy customer’s account to his personal account. The bank was held responsible for the act of the employee.

A CEO showed profits for the year 2018, when there was a loss of $150 million. The CEO was held responsible and convicted with jail and fine.

The government lost $50 million as it was overcharged by contractor and sub-contractors in the Middle East for fictitious hours and assets.

A student accessed the school computer and changed her school grade to be accepted into graduate school.

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1. "The steps in the accounting cycle for a merchandising company are different from the accounting cycle for a service company." Do you agree or disagree? Explain. 2. A local bank reported that it lost $150,000 as the result of an employee fraud. Mr. X is not clear on what is meant by an "employee fraud." Explain the meaning of fraud to Mr. X and give examples of frauds that might occur at a bank. 3. On September 1, ABC Company had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sept. 6 Purchased 80 calculators at $20 each from DeVito Co. for cash. Sept. 9 Paid freight of $80 on calculators purchased from DeVito Co. Sept. 10 Returned 2 calculators to DeVito Co. for $42 credit (including freight) because they did not meet specifications. Sept. 12 Sold 26 calculators costing $21 (including freight) for $31 each to Mega Book Store, terms n/30. Sept. 14 Granted credit of $31 to Mega…

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