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Describe the impact of the fraud on the net operating asset

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Reference no: EM132976706

Problem 1: A company had not inflated its income in prior periods. However, it fraudulently inflates its reported income in the current period by booking revenues early and delaying expenses. Which one of the following best describes the impact of this fraud on the net operating assets at the end of the current period? Net operating assets = Non-cash assets - Non-debt liabilities. Non-cash assets includes both current and non-current components and non-debt liabilities includes both current and non-current components.

a. Net operating assets will increase
b. Net operating assets will decrease
c. Net operating assets will remain unchanged.
d. There is no clear relationship between net operating assets and booking revenues earlier and delaying expenses.

Reference no: EM132976706

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